\u3000\u3 Guocheng Mining Co.Ltd(000688) 660 Shanghai Electric Wind Power Group Co.Ltd(688660) )
Key investment points
Performance summary: in 2021, the company achieved a revenue of 23.972 billion yuan, a year-on-year increase of 15.89%; The net profit attributable to the parent company was 507 million yuan, a year-on-year increase of 21.68%; The net profit deducted from non parent company was 413 million yuan, with a year-on-year increase of 36.64%. In the fourth quarter, the company realized a net profit attributable to the parent company of 23.63 million yuan, a year-on-year decrease of 91.55%, which is due to the fact that the net investment income in the fourth quarter was – 82.74 million yuan, a large decrease; The non net profit deducted was -12.67 million yuan, a year-on-year decrease of 105.36%; EPS0. 46 yuan.
The performance has increased steadily and the profitability is expected to continue to improve. The company still achieved stable growth in 2021. Specifically, during the reporting period, the company sold 700 offshore fans and 384 onshore fans. The increase in the proportion of offshore fans led to the improvement of the company’s profitability. In 2021, the company’s gross profit margin was 16.45%, with a year-on-year increase of 2.81pp. In the future, with the gradual evolution of offshore wind power to large-scale, continuous development and deep sea, the large-scale and intelligent cost reduction of wind turbines is expected to drive the continuous growth of the company’s profitability.
Increased investment in R & D and continuous innovation in product technology. In 2021, the company’s R & D investment was 925 million yuan, with a year-on-year increase of 65.26%. The proportion of R & D investment in revenue was 3.86%, with a year-on-year increase of 1.15pp. The company attaches great importance to technology R & D, and the R & D investment increased significantly. From the product side, the company strengthened the research and development of digital products, built a Zhuoke platform covering the semi direct drive route of the whole wind speed section, and realized the sharing of key components of sea and land products. In addition, the S89 blade independently developed by the company was the longest onshore blade in the world at that time, which has been applied to the onshore Zhuoke platform model; S90 offshore wind power blade passed the full-scale static test at one time, which was the longest wind power glass fiber blade in the world at that time. The company’s advanced product technology advantages provide sufficient basic guarantee for the sustainable development of performance.
Continue to promote the development of “two wings”, and the project resources are sufficient. (1) Increase access to new energy resources: in 2021, the company completed the signing of 22gw + new energy project development agreement, of which 600MW has been included in the provincial key development plan and approved by 100MW project, laying a solid foundation for follow-up; (2) Implementation of wind power project construction: by the end of the reporting period, the installed capacity of the company’s projects under construction was 200MW, and the cumulative grid connected capacity of self-owned wind farms reached 99mw, which had been greatly improved; (3) Reducing operation and maintenance costs by “pushing up the big and suppressing the small”: the company completed 75 projects in and out of the warranty period throughout the year, with a year-on-year increase of 59.6%. In addition, the company has made breakthroughs in the business of replacing small capacity old fans with large capacity new fans and lengthening blades.
Profit forecast and investment suggestions. The company is the leader of offshore wind power in China. The innovation of product technology is accelerated, and it is expected to drive the continuous improvement of profitability by reducing the cost of technology. We expect the net profit attributable to the parent company to be RMB 638 / 889 / 1232 million in the next three years, maintaining the “hold” rating.
Risk warning: the risk that the installed capacity of wind power is less than expected; Risk of sharp decline in fan price; Risk of rising raw material prices; The demand for wind power orders has decreased significantly, which poses the risk of the decline of the company’s capacity utilization.
