\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 618 Metallurgical Corporation Of China Ltd(601618) )
Event: the company released the annual report of 2021. In 2021, the company achieved a revenue of 500572 billion yuan, a year-on-year increase of 25.11%; The net profit attributable to the parent company was 8.375 billion yuan, a year-on-year increase of 6.52%.
The revenue of resource development business increased significantly. In 2021, the company achieved a revenue of 500572 billion yuan, a year-on-year increase of 25.11%. Among them, the general contracting achieved a revenue of 462.29 billion yuan, a year-on-year increase of 27.01%; The real estate development business realized a revenue of 21.416 billion yuan, a year-on-year decrease of 11.19%; The equipment manufacturing business achieved a revenue of 11.623 billion yuan, a year-on-year increase of 5.12%; The revenue of resource development business was 6.669 billion yuan, a year-on-year increase of 52.14%; Other businesses achieved a revenue of 6.162 billion yuan, a year-on-year increase of 66.44%. In 2021, the company’s net profit attributable to the parent company was RMB 8.375 billion, with a year-on-year increase of 6.52%. The growth rate of net profit was lower than that of revenue. The main reason was that the company accrued impairment provision of RMB 5.339 billion during the reporting period, an increase of RMB 1.659 billion over last year, and the company’s net cash flow from operating activities was RMB 17.64 billion, a decrease of RMB 10.392 billion over last year. In 2021, the gross profit margin and net profit margin of the company were 10.62% and 2.32% respectively, with year-on-year changes of -0.73pct and -0.02pct respectively.
The proportion of non metallurgical projects in newly signed project contracts increased. During the reporting period, the company achieved a newly signed contract amount of 1204980 billion yuan, an increase of 18.17% over the same period last year. The newly signed project contract amount was 116766 billion yuan, a year-on-year increase of 18.61%. Among them, the newly signed metallurgical engineering contract amount was 157794 billion yuan, a year-on-year increase of 10.04%, and there were no major metallurgical projects outside China; The newly signed non metallurgical engineering contracts amounted to 1 Shenzhen Keanda Electronic Technology Corp.Ltd(002972) billion yuan, with a year-on-year increase of 20.09%, accounting for 86.41%, an increase of 1.06 PCT over last year. With the gradual decline of structural dividends such as steel plant relocation and transfer and capacity replacement, the metallurgical construction market has gradually changed from increment to stock. Under the background of “double carbon”, the reduction of carbon emission from metallurgical engineering brings opportunities to the company. At the same time, the company continues to make efforts in the field of housing construction and infrastructure construction, continuously deepen cooperation with local governments, large enterprises and other strategic customers, and actively expand urban renewal and transformation, overall development of regional areas and other businesses; Transplant, transform and continuously innovate the technological advantages in the field of metallurgy to the field of emerging industries. It is expected that the proportion of non metallurgical projects in the new contracts signed by the company will continue to increase in the future.
The leading position in the field of metallurgical engineering is stable, and other businesses are actively expanded. The company is the world’s largest metallurgical construction contractor and metallurgical enterprise operation service provider, with a solid leading position in the industry. At the same time, the company actively expanded other fields, and the income in the field of housing construction and infrastructure construction continued to grow; Major breakthroughs have been made in ecological and environmental protection (including municipal sewage treatment, river regulation, waste incineration, solid waste treatment, soil remediation, mine remediation), new energy projects, theme parks and other fields; In the field of real estate, MCC real estate, the flagship real estate enterprise of the company, accelerated the reserve of high-quality land in key areas; In the field of resource development, the “double carbon” strategy has prompted a major adjustment in the supply and demand structure of minerals and promoted the explosive growth of new technology minerals.
Investment suggestion: it is estimated that the company’s revenue from 2022 to 2023 will be 57.566/63.322 billion yuan respectively, with a year-on-year increase of 15% / 10%, the net profit attributable to the parent company will be 9.464/10.505 billion yuan respectively, with a year-on-year increase of 13% / 11%, the EPS per share will be 0.46/0.51 respectively, and the PE corresponding to the current stock price will be 9.4/9.2 times respectively, maintaining the “recommended” rating.
Risk warning: the risk of decline in fixed asset investment and the risk of covid-19 epidemic affecting the project progress; The risk that the recovery of accounts receivable is less than expected.
