\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 502 Anhui Construction Engineering Group Corporation Limited(600502) )
Matters: the company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 71.340 billion yuan, a year-on-year increase of 25.22%; The net profit attributable to the parent company was 1.096 billion yuan, a year-on-year increase of 34.32%; Earnings per share was 0.64 yuan, a year-on-year increase of 36.17%; It is proposed to distribute cash of 2.5 yuan (including tax) for every 10 shares.
The business structure has been continuously optimized, and infrastructure projects have increased at a high speed. The company fully benefited from the steady growth policy, and the newly signed orders showed an increasing trend year by year. In 2020, the newly signed orders of the company were 62.7 billion yuan respectively, with a year-on-year increase of 24.68%; In 2021, the company signed new orders of 75.9 billion yuan, a year-on-year increase of 21.00%; Since 2022, the company has announced a total bid winning amount of 31.9 billion yuan for major projects, an increase of 79.19% over the amount of new orders signed in the first quarter of 2021. At the same time, the order structure of the company continued to be optimized, and the proportion of infrastructure orders with high gross profit increased. In 2020, the company signed 38.3 billion yuan of new orders for infrastructure projects, with a year-on-year increase of 21.94%; In 2021, new orders for infrastructure projects were 44.9 billion yuan, a year-on-year increase of 17.10%. The change of order structure brings about the change of business structure and helps the release of the company’s performance.
From 2019 to 2021, the company’s capital construction business revenue was 18.175 billion yuan, 22.991 billion yuan and 34.233 billion yuan respectively, with a year-on-year increase of 0.50%, 26.50% and 48.90% respectively. The gross profit margin of infrastructure projects is relatively high, which is 10.66%, 10.64% and 9.06% respectively from 2019 to 2021, driving the overall gross profit margin of the company higher. The overall gross profit margin of the company from 2019 to 2021 is 12.02%, 11.62% and 11.18% respectively.
The provision for impairment is relatively sufficient and the performance is fully motivated. The company’s revenue continued to increase. From 2019 to 2021, the company’s operating revenue was 47.266 billion yuan, 56.972 billion yuan and 71.340 billion yuan respectively, with a year-on-year increase of 21.73%, 20.54% and 25.22% respectively. The impairment provision of the company is sufficient. From 2019 to 2021, the asset impairment loss of the company was 523 million yuan, 293 million yuan and 67 million yuan respectively, and the credit impairment loss was 677 million yuan, 607 million yuan and 1244 million yuan respectively. The higher impairment loss does not change the accelerated release trend of the company’s performance. From 2019 to 2021, the company’s net profit was RMB 757 million, RMB 1214 million and RMB 1413 million respectively, with a year-on-year increase of – 7.71%, 60.39% and 16.45% respectively; The net profit attributable to the parent company was 596 million yuan, 816 million yuan and 1096 million yuan respectively, with a year-on-year increase of – 25.47%, 36.84% and 34.32% respectively. The impairment loss of the company mainly comes from the high accrual of receivables from two real estate projects and Evergrande real estate. Some impairment losses are likely to be reversed in the future. It is expected that the impairment loss of the company will return to normal in 2022, and the impact of impairment loss on the company’s performance will be weakened. In addition, with the rapid growth of newly signed orders, the release of the company’s performance will maintain a high growth rate in the next few years.
Actively layout green buildings and the rapid rise of prefabricated industry. The company actively responds to the call of national policies, actively arranges green buildings and vigorously develops prefabricated buildings. In August 2015, the company completed and put into operation Feidong PC base, with a design annual output of 160000 cubic meters of PC prefabricated components, which has accumulated rich experience for the development of the company’s assembly industry. In recent years, the company has continued to increase investment in the assembly industry. In 2020, Wushan PC base was completed and put into operation, adding 50000 m3 of PC construction and 50000 m3 of tube production capacity; In 2021, Bengbu PC base phase I and Changfeng Wushan base will be completed and put into operation, adding 160000 m3 of PC capacity and 110000 m3 of rail transit pipe capacity; In January 2022, the company’s Wuhu steel structure base was put into operation, adding 80000 tons of steel structure capacity. At present, the company’s Tongling PC base and Lu’an bridge steel structure base are under construction. It is expected to be completed and put into operation in 2022, with a new PC capacity of 150000 m3 and a bridge steel structure capacity of 50000 tons. In addition, the company’s Huaibei PC base is in the preparation stage, and it is expected to add 100000 m3 of PC capacity after completion. It is estimated that by 2025, the company will have 10 assembly production bases and have the assembly production capacity to serve Anhui and radiate the Yangtze River Delta. In 2020, the company signed 223 million yuan of new contracts for the assembly industry, with a year-on-year increase of 107%; In 2021, the newly signed contracts reached 755 million yuan, a year-on-year increase of 238%; It is expected that the newly signed contracts will still maintain rapid growth in 2022, and the assembled type is expected to become a new performance growth point of the company.
Actively develop hydropower business, and green energy is expected to increase. At the beginning of listing, the company’s business mainly focused on “water”, and hydropower station investment and operation is one of the company’s main businesses. In 2006, the company invested in the construction of the first hydropower station – Liubo hydropower station. So far, the company has controlled and operated seven hydropower stations, with a total installed capacity of 246100 kW and an annual design power generation of 1 billion kwh. The company has the ability to integrate investment, financing, construction and operation of hydropower stations, cultivated a number of professionals in construction, investment and operation, and formed a stable talent team. At present, the state vigorously develops pumped storage and encourages social capital to enter. Anhui Province is also a large province of pumped storage. As a provincial holding large enterprise group, the company has great prospects in the field of pumped storage. In 2004, the company established Bengbu Tushan pumped storage power station construction and Development Co., Ltd. to actively promote the planning, approval and construction of Tushan pumped storage power station, but the project was shelved due to the policy. With the liberalization of pumped storage policy, the company is expected to increase green energy, and the development of pumped storage industry is expected to be put on the agenda.
Profit forecast and investment suggestions: structural optimization contributes to rapid growth, adds new impetus to Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) layout and maintains the “Buy-A” rating. It is estimated that the operating revenue of the company from 2022 to 2024 will be 85.608 billion yuan, 98.449 billion yuan and 110263 billion yuan respectively, with a year-on-year increase of 20.00%, 15.00% and 12.00% respectively; The net profit attributable to the parent company was 1.475 billion yuan, 1.846 billion yuan and 2.213 billion yuan respectively, with a year-on-year increase of 34.64%, 25.15% and 19.88% respectively; EPS is 0.86 yuan, 1.07 yuan and 1.29 yuan respectively, dynamic PE is 5.7 times, 4.6 times and 3.8 times respectively, and dynamic Pb is 1.0 times, 0.8 times and 0.7 times respectively. The company is a large state-owned construction enterprise in the province, which fully benefits from the steady growth policy. The newly signed orders have increased rapidly, the order structure has been continuously optimized, and the performance release is expected to accelerate. At the same time, the company actively arranges green buildings and vigorously develops the assembly industry. The “cross” capacity layout is taking shape, and the assembly industry is expected to become a new performance growth point of the company. In addition, the company makes full use of the advantages of investment, financing and construction integration of hydropower stations and professionals, and is expected to add green energy, and the pumped storage industry is expected to be put on the agenda. Optimistic about the growth of the company’s main business and Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) layout, improve the company’s valuation, maintain the “Buy-A” rating, the target price is 6.88 yuan, corresponding to 8.03 times of dynamic PE in 2022.
Risk tips: policy is not as expected, order execution is slow, project payment collection risk, new business development is blocked, etc.
