\u3000\u3 Bohai Water Industry Co.Ltd(000605) 090 Jiangxi Jovo Energy Co.Ltd(605090) )
Investment logic
The company has the advantage of hydrogen source and can contribute revenue as soon as the end of 2022. ① By product hydrogen: the company and juzhengyuan plan to establish a joint venture to sell the by-product hydrogen of purified juzhengyuan propane dehydrogenation project, with a phase I capacity of 25000 tons / year, which is the largest by-product hydrogen capacity in Guangdong at present. It is expected to be put into operation in the fourth quarter of 2022 as soon as possible. In 2022 and 2023, the sales volume of high-purity hydrogen will be 30000 and 15000 tons, and the revenue contribution will be 50 and 240 million; ② Hydrogen production from natural gas: it is estimated that by 2025, the supply and demand gap of high-purity hydrogen in Guangdong will reach 300000 tons. The company’s low-cost imported LNG resources have the economy of hydrogen production. The company’s hydrogen production from natural gas will become a strong guarantee for hydrogen for vehicles in Guangdong. ③ Electrolytic hydrogen production: at present, Guangdong supports hydrogen production in stations. With the support of policies, the cost of hydrogen production in Guangdong Gudian can be as low as about 17 yuan / kg. The company can use its own LNG filling station to layout hydrogen production in stations. ④ Superior geographical location: the company’s hydrogen source is located in Dongguan, adjacent to Shenzhen, Guangzhou and Foshan, three cities with the highest number of fuel cell vehicles and low cost. It is expected that the hydrogen project will achieve “full production and full sales” after it is put into operation.
Under the background of high international oil prices, the bottom of the company’s traditional main business has proved that LNG sales are expected to continue to grow. The company is an imported LNG / LPG service provider, which is at the bottom of the profit cycle in 2021. The company has successfully ensured profits through the following measures: ① it has made efforts to expand end customers and improve the ability of favorable price. The proportion of end customers in China has doubled year-on-year to 70%; ② Expand entrepot trade and increase profits by exchanging price for quantity with the advantages of its own wharf and transport ship; ③ Sign a medium and long-term TUA agreement with the national pipeline network to expand the LNG pipeline. The LNG sales volume is expected to grow steadily. The LNG sales volume is expected to increase by 40% / 25% / 34% year-on-year in 2021 / 2022 / 2023 (considering Yuanfeng Sentai), reaching 180 / 220 / 3 million tons respectively.
Yuanfeng Sentai, an LNG enterprise to be acquired, will have a production capacity of 1.2 million tons in 2025. At present, Sentai has a total capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons / year. In the future, with the production of four projects, the capacity will reach 800000 tons in 2023 and continue to expand to 1.2 million tons in 2025, which is equivalent to the LNG sales of listed companies. In addition, Sentai’s feed gas comes from China’s “land gas”, while the listed company purchases LNG from the imported “Sea gas”. The two sides have complementary attributes, which is conducive to reducing the profit fluctuation of the listed company after the acquisition.
Investment advice and valuation
At present, the bottom of the company’s traditional business has been explored and hydrogen energy business has been actively deployed. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 760 / 10.8 / 1.46 billion respectively, and the corresponding EPS will be RMB 1.71/2.44/3.30 respectively. Give the company 20 times PE in 2022, corresponding to the target price of 48.80 yuan / share, and give a “buy” rating.
Risk tips
The risk of lifting the ban on restricted shares, the risk of excessive overseas LNG purchase price, the risk of acquisition less than expected, the risk of project production less than expected, and the risk of RMB exchange rate fluctuation.
