\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 390 China Railway Group Limited(601390) )
Q1 orders increased by 84% higher than expected, achieving steady growth and making a good start. The company announced that the newly signed orders in Q1 were 605.7 billion yuan, a year-on-year increase of 84.0%, and the growth rate reached a single quarter high since 2014. The main reasons are as follows: 1) with the steady growth policy, the company has actively grasped the opportunities and strengthened market development. 2) The base was low in the same period last year (21q1 orders fell 2.5% year-on-year). In terms of business, the newly signed orders of infrastructure business were 543.5 billion yuan, a significant increase of 94% year-on-year, of which railway / highway / municipal and other orders were 569 / 849 / 401.7 billion yuan, an increase of 7.9% / 147.5% / 108.1% respectively. The orders of highways and municipal services have a significant force. From the disclosure of major orders, municipal services are mainly industrial parks, urban renewal and other orders; A number of large-scale highway construction, expansion and reconstruction projects have been signed. Among non contracting businesses, survey and design / industrial equipment / real estate development / others were newly signed with RMB 119 / 149 / 72 / 28.3 billion respectively, yoy + 157.5% / + 5.4% / – 28.4% / + 38.4%. The high growth of design business is expected to be mainly due to the acceleration of the preliminary work of infrastructure projects in the first quarter; The decline in real estate orders is expected to be mainly affected by the overall environment of the industry. By region, the newly signed contract amount of domestic business was 566.2 billion yuan, a year-on-year increase of 81.7%; The newly signed contract amount of overseas business was 39.6 billion yuan, a year-on-year increase of 123.6%, and overseas operations continued to be repaired. By the end of 2021, the outstanding contract amount of the company was 4.21 trillion yuan, about four times the revenue in 2021. There were sufficient orders on hand to ensure sustained and steady growth in the future.
In 2021, the non deduction performance was brilliant, and the equity incentive stimulated the market value power and defined a clear growth target. In 2021, the company achieved an operating revenue of 1070.4 billion yuan, a year-on-year increase of 10.19%; The net profit attributable to the parent company was 27.6 billion yuan, a year-on-year increase of 9.65%; Deduction of non performance was 26.1 billion yuan, with a year-on-year increase of 19.35%, showing a bright performance. The company has completed the first award of the restricted stock incentive plan this year. The plan sets a clear target that the compound growth rate of fee deduction performance from 2020 to 2024 will not be less than 12%, and the roe assessment will rise year by year, demonstrating the company’s confidence in sustained and steady growth and continuous improvement of roe in the next three years. At the same time, the equity incentive plan is also expected to bind the interests of executives, backbone and shareholders, and further stimulate the company’s performance and market value.
The steady growth policy is expected to be strengthened, and the valuation of the company, as the leader of large infrastructure construction, is expected to continue to be repaired. At present, the epidemic has repeatedly impacted the economy. The recent national standing committee will focus on “adhering to the goal and not relaxing, placing steady growth in a more prominent position, and the policies to stabilize the economy come out early and quickly”, highlighting the urgency of steady growth after the repeated epidemic. It is expected that the follow-up infrastructure steady growth policy is expected to be strengthened, and the real estate policy is expected to continue to be loose. Considering the policy support, rush work after the epidemic and the low base in the second half of last year, the fundamentals of the construction industry are expected to improve significantly in the second half of last year, which is expected to drive the valuation expansion of the sector. As the leader of large infrastructure construction, the company has strong order growth, clear performance objectives and continuous improvement of incentive mechanism. The current valuation of PE in 22 years is only 5 times, which is at the lowest range in history. It is expected to usher in valuation repair driven by steady growth policy.
Investment suggestion: we estimate that the net profit attributable to the parent company of the company in 22-24 years will be 31.1/34.9/39.2 billion yuan respectively, an increase of 13% / 12% / 12% respectively, and EPS will be 1.26/1.41/1.58 yuan respectively. At present, the corresponding PE of the stock price is 5.2/4.6/4.1 times respectively, and Pb (LF) is 0.70 times at present, maintaining the “buy” rating.
Risk tips: the steady growth fails to meet expectations, the risk of repeated epidemics, the provision for real estate impairment increases, and the project progress fails to meet expectations
