\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 669 Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) )
Core conclusion
The company is a global engineering contracting giant and an integrated service provider of the whole industrial chain. The shareholders of the company are leading enterprises in water conservancy and hydropower, clean energy, infrastructure and other fields. They have the wide field advantages of “large civil engineering and large construction” horizontally and the whole industrial chain ability of planning and design, construction contracting, equipment manufacturing and operation management vertically. The company undertakes more than 80% of the planning and design tasks and more than 65% of the construction tasks of China’s large and medium-sized hydropower stations, and occupies more than 50% of the global large and medium-sized water conservancy and hydropower construction market. In 2021, the newly signed contract amount was 780283 billion yuan, a year-on-year increase of 15.9%.
The company is a leading enterprise in pumped storage design and construction, which directly benefits the accelerated development of the industry. According to the medium and long term development plan of pumped storage issued by the national energy administration, China plans to put the scale of pumped storage into operation in 2030 to reach 120 million KW, which is nearly four times the scale of pumped storage put into operation by the end of 2020, and the total installed capacity of medium and long-term key implementation projects is about 421 million KW. As the earliest participant in the construction of pumped storage power stations in China, the company has participated in the planning, design and construction of more than 90% of pumped storage power stations in China, and there is huge room for performance growth in the field of pumped storage.
The company has increased investment in new energy and business development to create a growth point of performance. By the end of 2020, the company had more than 1.6gw of grid connected installed capacity, of which clean energy accounted for 80%. The company has rich project development resources, strong financial strength and core competence of investment, construction and industrial chain integration. According to the documents issued by the company, during the 14th Five Year Plan period, the installed capacity of wind power and photovoltaic power newly controlled and put into operation is 30-48.5gw, and the CAGR is about 41% – 53%, which is expected to achieve leapfrog development.
Investment suggestion: it is estimated that the operating revenue of the company from 2021 to 2023 will be 467577/546616/620088 billion yuan, yoy + 16.6% / + 16.9% / + 13.4%, the net profit attributable to the parent company will be 88.97/105.87/12.523 billion yuan, yoy + 11.4% / + 19.0% / + 18.3%, and EPS will be 0.58/0.69/0.82 yuan respectively. Based on the segment valuation method, the performance in 2022 corresponds to a reasonable market value of 144.7 billion yuan and a target share price of 9.46 yuan / share, with a “buy” rating for the first time.
Risk tips: macroeconomic risks, the implementation of Pumped Storage Planning and electricity price policy is not as expected, the price of new energy equipment rises, and the risk of intensified competition
