\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 868 China Energy Engineering Corporation Limited(601868) )
Key investment points
In 2021, the revenue increased by 25.11%, driven by engineering construction and industrial manufacturing
In 2021, the company achieved revenue of 322319 billion yuan, yoy + 19.23%, net profit attributable to parent company / net profit deducted from non parent company of 6.504/5.072 billion yuan, yoy + 39.26% / + 37.69%. Quarter by quarter, the revenue of 21q1 / Q2 / Q3 / Q4 was 613 / 802 / 680 / 112.7 billion yuan, yoy + 71.0% / + 15.0% / + 2.2% / + 14.8%, corresponding to the net profit attributable to the parent company of 8.2/15.3/10.1/3.14 billion yuan, yoy + 374.7% / + 28.9% / – 8.6% / + 17.2%. We analyzed that the high revenue growth was driven by the following factors: 1) the company’s general contracting of energy projects and traditional energy power generation projects led to a high increase of 24.45% in the operating revenue of the engineering construction sector; 2) The increase of the company’s civil blasting and equipment manufacturing business led to a high increase of 16.47% in the operating revenue of the industrial manufacturing sector; 3) The company steadily implemented the limited related diversification strategy, and its software and information services, logistics trade, leasing and business services increased by 9.45% year-on-year.
The expense ratio decreased by 0.6pct compared with 20 years, with excellent cash flow and basically the same year-on-year impairment loss
In terms of gross profit: the gross profit margin in the whole year of 21 was 13.2%, 0.4pct lower than that in 20 years; Quarterly, the gross profit margin of 21q1 / Q2 / Q3 / Q4 is 11.6% / 12.7% / 13.0% / 14.5% respectively. In terms of expenses: the expense rate during the 21-year period was 8.3%, a decrease of 0.6pct compared with 20 years, the sales / management / Finance / R & D expense rate was 0.5% / 6.7% / 1.1% / 2.7% respectively, the sales / management / finance expense rate decreased by 0.2/0.1/0.3pct compared with 20 years, and the R & D expense rate increased by 0.2pct. The financial expenses decreased by 3.2% year-on-year in 21 years, mainly due to the decline of the overall interest rate and the low interest rate of new loans in 21 years; In terms of cash flow: the net operating cash flow in 21 years was 8.84 billion yuan, with an increase of 2.35 billion yuan year-on-year, mainly due to the increase of business work and the increase of advance receipts; The total impairment loss in 21 years was 1.86 billion yuan, which was basically the same as 1.75 billion yuan in 20 years, and the risk was well controlled.
The leading position of energy and electricity is prominent: in the past 21 years, the number of new contracts increased by 51%, and the number of new energy businesses increased by 53%
The company’s new contracts in 21 years increased by 51% year-on-year, of which the new contracts of new energy business increased by 53% year-on-year. In 2021, the company signed 872.6 billion yuan of new contracts, with a year-on-year increase of 51% and a compound growth rate of 30% compared with 2019. In terms of business, the main business of engineering construction newly signed 800.9 billion yuan, with a year-on-year increase of 46%, and all sub tracks are in full bloom: 1) among them, the new energy and comprehensive smart energy business dominated by wind, light, storage and hydrogen achieved a new contract amount of 192.8 billion Yuan throughout the year, with a year-on-year increase of 53%, and the proportion in engineering construction orders increased from 23% in 20 years to 24% in 21 years; 2) The new contract value of traditional energy projects dominated by thermal power, hydropower, power transmission and transformation and nuclear power was 19.9 billion yuan, a year-on-year increase of 22%. Quarterly, the newly signed contract amount of 21q1 / Q2 / Q3 / Q4 was 2439 / 2394 / 1091 / 280.2 billion yuan, a year-on-year increase of + 91% / + 35% / + 5% / 67%. The company’s new contracts exceeded expectations throughout the year, the new energy infrastructure was launched on schedule, and the business growth momentum was sufficient.
The main force of the “double carbon” strategy: in the past 21 years, the cumulative holding installed capacity was 4.6gw, with an increase of 1.8gw
As a leading central enterprise of new energy infrastructure, the company is expected to deeply benefit from the “double carbon” strategy, and the order growth of new infrastructure projects is expected to exceed expectations. 1) In terms of holding installed capacity: as of the end of 21, the company held 4.6gw of grid connected installed capacity, an increase of 1.8gw compared with the end of 20. Among them, hydropower 0.8gw, wind power 1.4gw, photovoltaic 1.0gw and biomass power 0.2gw. 2) 22q1 new energy investment: the company’s “3060” action plan proposes to comprehensively enter new energy, energy storage and other related industries and strengthen the development of new energy “investment, construction and operation integration” projects. On March 22, the company’s total investment of nearly 10 billion yuan, wind power, energy stations and other investment and construction projects started, with a total installed capacity of 1.6gw; In March, the company successively signed strategic cooperation agreements with Mingyang group and China Anneng, committed to developing integrated energy base projects such as Fengguang energy storage, and promoted the high-quality development of the company’s new energy business.
Profit forecast and valuation
It is estimated that the company’s operating revenue from 2022 to 2024 will be 374.8 billion yuan, 440.3 billion yuan and 513.7 billion yuan, with a year-on-year increase of 16.29%, 17.48% and 16.65%. The net profit attributable to the parent company from 2022 to 2024 will be 9.584 billion yuan, 11.033 billion yuan and 12.749 billion yuan, with a year-on-year increase of 47.36%, 15.12% and 15.55%, corresponding to EPS of 0.23, 0.26 and 0.31 yuan. The current price corresponding to PE is 10.6, 9.2 and 8.0 times. Maintain the “overweight” rating.
Risk tip: the growth rate of infrastructure investment is lower than expected; The growth rate of new energy investment was lower than expected.
