\u3000\u3 China Vanke Co.Ltd(000002) 060 Guangdong No.2 Hydropower Engineering Company Ltd(002060) )
Event: the company released the annual report of 2021. In 2021, the company achieved a revenue of 14.361 billion yuan, a year-on-year increase of 14.13%; The net profit attributable to the parent company was 328 million yuan, a year-on-year increase of 24.45%; The net profit attributable to the parent company after deduction was 324 million yuan, a year-on-year increase of 19.73%.
Revenue grew steadily and profitability improved. In 2021, the company achieved a revenue of 14.361 billion yuan, a year-on-year increase of 14.13%. Among them, the revenue of water conservancy and hydropower was 8.496 billion yuan, a year-on-year increase of 29.85%; The revenue of municipal projects was 2.393 billion yuan, a year-on-year increase of 0.69%; Other projects achieved a revenue of 644 million yuan, a year-on-year decrease of 3.83%; Product sales realized a revenue of 1.006 billion yuan, a year-on-year decrease of 28.22%; The revenue of hydropower generation was 251 million yuan, a year-on-year decrease of 10.77%; The revenue of wind power generation was 887 million yuan, a year-on-year increase of 20.64% Cecep Solar Energy Co.Ltd(000591) power generation achieved a revenue of 553 million yuan, a year-on-year increase of 19.17%; The revenue of survey, design and consulting services was 74 million yuan, a year-on-year increase of 8.99%; Other businesses achieved a revenue of 59 million yuan, a year-on-year increase of 85.25%. In 2021, the net profit attributable to the parent company was 328 million yuan, with a year-on-year increase of 24.45%. The gross profit margin and net profit margin were 11.25% and 2.55% respectively, with a year-on-year increase of 0.09pct and 0.36pct respectively. The net operating cash flow was 847 million yuan, a decrease of 124 million yuan compared with last year.
Based on Guangdong, there is a broad market space for water conservancy + rail transit construction. The company is located in Guangdong, and the actual controller is the state owned assets supervision and Administration Commission of Guangdong Province. In 2021, the revenue from Guangdong reached 11.426 billion yuan, accounting for 79.56% of the total revenue. In 2021, the company signed 7.792 billion yuan of new orders, a year-on-year decrease of 16.61%. According to the 14th five year plan for water conservancy development in Guangdong Province, the investment scale of water conservancy construction in Guangdong Province during the 14th five year plan is expected to be 405 billion yuan, an increase of 117.39% over the investment scale during the 13th five year plan. According to the “14th five year plan” for the development of Guangdong’s comprehensive transportation system, Guangdong Province has arranged a total investment of about 2 trillion in major transportation infrastructure construction projects during the 14th five year plan, an increase of 39.86% over the total investment in transportation infrastructure in the province during the 13th five year plan. The company’s engineering construction mainly includes water conservancy and hydropower engineering construction and rail transit engineering construction, with broad development space in the future.
The prospect of clean energy power generation business is promising. Dual carbon driven energy transformation, and the proportion of clean energy power generation will continue to increase in the future. The company has actively expanded its clean energy power generation business in northwest regions such as Xinjiang and Gansu and southeast coastal regions such as Guangdong and Shandong. By the end of 2021, the company has accumulated a total installed capacity of 1,42.38mw of clean energy projects put into operation, including 263mw of hydropower, 673mw of wind power and 606.38mw of photovoltaic power. At the same time, the company is the largest wind power tower manufacturer in Guangdong Province and the first echelon enterprise of wind power equipment manufacturing in China. Its future development prospects are promising.
Investment suggestion: it is estimated that the company’s revenue from 2022 to 2023 will be RMB 18.239/22.434 billion respectively, with a year-on-year increase of 27% / 23%, the net profit attributable to the parent company will be RMB 404 / 495 million, with a year-on-year increase of 24% / 23%, EPS per share will be 0.34/0.41, corresponding to the current share price PE of 26.2/21.4 times respectively, maintaining the “recommended” rating.
Risk warning: the risk of intensified market competition; Risk of covid-19 epidemic affecting project progress; Risks of construction cost changes caused by price changes of labor services, material costs, construction machinery, etc.
