\u3000\u3 Shengda Resources Co.Ltd(000603) 727 Bomesc Offshore Engineering Company Limited(603727) )
Event: the company released the annual report of 2021. In 2021, the company realized a revenue of RMB 4.081 billion, a year-on-year increase of + 58.2%, a net profit attributable to the parent of RMB 166 million, a year-on-year increase of + 26.3%, and a net profit not attributable to the parent of RMB 145 million, a year-on-year increase of + 82.1%.
Revenue hit a record high in 2021, and the epidemic + power restriction affected the profitability of the company in the second half of the year. Benefiting from the continuous completion of abundant orders in hand in the early stage, the company’s revenue reached 4.081 billion yuan in 2021, a record high since the establishment of the company. However, due to the power restriction caused by Q3 “dual control of energy consumption” policy in 2021, the company rented generators to ensure the completion progress, but the completion progress of the company’s project is still affected in the short term, and the relevant expenses are increased. In addition to the problem of power restriction, the epidemic situation in Tianjin since 21q4 has also led to a slight delay in the company’s completion progress and an increase in the cost rate. The impact of the epidemic situation is mainly reflected in the following aspects: 1. The company’s industry is a labor-intensive industry. At the peak of construction in 2021, the number of on-site labor personnel reached 1 Rizhao Port Co.Ltd(600017) 000, but due to the epidemic situation, the number of on-site labor personnel has decreased to 8 Tcl Technology Group Corporation(000100) 00 recently; 2. The epidemic has caused the upstream designers to work at home, reduced the efficiency of communication and coordination, and put pressure on the overall project; 3. Increase the pressure of overseas commodity supply cycle and the price increase of overseas suppliers; 4. The company implemented strict epidemic control measures at the wharf, the utilization efficiency of relevant human resources decreased significantly, and the direct costs of detection, killing and isolation increased; 5. The schedule lag disrupts the original site resource allocation plan, and the superposition of different project durations affects the construction efficiency and cost. Therefore, while the revenue hit a record high, the gross profit margin of 2021q1-q4 company was 16.2% / 12.6% / 13.0% / 3.8%, and the net profit margin was 8.9% / 6.6% / 4.4% / – 1.7% respectively. The net profit margin was dragged down by the epidemic and power restriction in the short term.
LNG business accounted for 56.6%, and the rate increased slightly during the period. By business, in 2021, the company’s LNG business revenue reached 2.31 billion yuan, accounting for 56.6% of the revenue and 21.8% of the gross profit margin, a year-on-year increase of -6.7pp; FPSO business revenue accounted for 1.76 billion yuan, accounting for 43.1% of revenue, with a gross profit margin of – 3.4%, a year-on-year increase of + 9.0pp. The overall gross profit margin and net profit margin of the company in 21 years were 10.7% / 4.1%, with a year-on-year increase of + 0.7pp / – 1.0pp, basically the same as last year. In terms of expense rate, the company’s sales / management / R & D / financial expense rate in 2021 was 0.1% / 1.8% / 4.7% / – 0.1% respectively. The total rate during the period was 6.5%, with a year-on-year increase of + 0.2pp.
The new capacity is gradually released, and the company is optimistic about the subsequent reversal. The short-term risk points of the company come from two points. On the one hand, it comes from the slow completion progress of the company’s projects and the increase of rate and cost caused by power restriction, epidemic situation, bulk price increase and other reasons; On the other hand, the conflict between Russia and Ukraine led to the delay of Russian LNG order issuance. We believe that power rationing, epidemic and other reasons are mainly short-term risks, and the relevant risks gradually shrink after 2022q1; Although the conflict between Russia and Ukraine has a short-term impact on the rhythm of LNG order awarding, Russia has written LNG Development into its national strategy. Under the current situation of high international oil prices, with the gentle geographical conflict, the demand for oil and gas energy exploitation will continue to increase. At present, the capital expenditure in Brazil where the company’s FPSO is located is gradually increasing. From the perspective of the company’s internal strength, the company has 760000 square meters of production site in Tianjin Lingang Economic Zone, 700m deep-water wharf, and has the ability to undertake the general assembly business of FPSO, flng or fsru projects. At the same time, it has 325m deep-water wharf expansion resources. The site and wharf resources are improved compared with that in 2021 (670000 square meters of site and 700m of Wharf in 21 years), so as to strengthen its future order receiving strength. Therefore, we are optimistic about the company’s subsequent reversal logic.
Profit forecast and investment suggestions: the company’s performance forecast was lowered due to the impact of the epidemic and the conflict between Russia and Ukraine. It is estimated that from 2022 to 2024, the net profit attributable to the parent company will be RMB 180 / 2.1 / 340 million, corresponding to PE 24 / 20 / 12x, maintaining the “buy” rating.
Risk warning: the completion schedule of the company is low, the expected risk, the risk of exchange rate fluctuation, and the expansion of global LNG production is less than expected
