\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 416 Xiangtan Electric Manufacturing Co.Ltd(600416) )
The annual net profit attributable to the parent company was RMB 2020.5 billion, with a year-on-year net profit of RMB 2020.5 billion and a year-on-year net profit of -2.6 billion. The decline in revenue in 2021 was mainly caused by the stripping of the equity of wind energy companies and the decline in the sales of wind turbines in 2021, which included the revenue of wind turbines in 2020. Therefore, there were many inconsistent entities at the end of the income statement.
2022 plan: strive to achieve annual revenue of 5 billion yuan, with a year-on-year increase of about 25%. We believe that the company’s revenue growth mainly comes from two aspects.
1. Military products: the company’s core products, special products and spare parts have achieved rapid growth in 2021, with revenue of 1.202 billion yuan, a year-on-year increase of + 125.91%. Military products are expected to continue to grow at a high rate in 2022 due to:
1) overall strategic level: the company establishes the strategic orientation of giving priority to the development of electromagnetic energy industry, takes the development of military industry as the breakthrough for the company’s high-quality development, promotes the industrialization of leading technologies, leads and leads the creation of a new generation of electromagnetic and electrical technology industrial chain, and speeds up the transformation of global leading technologies into global leading industries.
2) product 1: vehicle mounted special equipment system: cooperating with the team of well-known academicians, the vehicle mounted special system is gradually transforming to serialization and industrialization. The company has set an increase in fund-raising and started to prepare for industrialization.
3) product 2 / 3, special launch and ship power system: it has entered the stage of batch ordering. The market share of the company in these two fields is 100%, and the product volume + exclusive will bring huge performance growth points.
4) product 4 / 5 / 6, military to civilian direction, civil satellite launch, flywheel energy storage, all electric push civilian ship: use the existing advanced technology to broaden the service field and application space of military civilian integration. The company is carrying out research and development of civil satellite launch technology and products; The developed flywheel energy storage system has entered the stage of installation and commissioning. The product is a single unit in China with the largest power, the product performance has reached the world advanced level, and the cost and price advantages are obvious; We are accelerating the industrialization of ship integrated power system.
2. Civil products: motor + electric control civil products are fully connected with the national “double carbon” strategy, and the order receiving volume of civil products has increased significantly in 2022q1. Accelerate the implementation of the company’s “double carbon” strategy in five areas (energy efficiency improvement, energy-saving products and equipment, electromechanical integration system substitution of traditional power, energy storage and other application microgrid systems, and other high-end products). According to the company’s official account, 2022Q1, the low voltage motor business department has won more than 20 auxiliary projects of wind power auxiliary motor, such as yaw motor and variable pitch motor, and the number of orders increased by 53% compared with the same period last year. The orders of the electrical transmission division increased by 3 times year-on-year.
1) high efficiency and energy-saving motors: in the future, the company will take the national motor energy efficiency improvement plan as an opportunity to further improve the motor energy efficiency level to the world advanced level from the aspects of technology, design, process, production and manufacturing, and realize the comprehensive replacement of motors with energy efficiency of grade II and above.
2) substitution of Mechatronics System: the company has developed products of mining flotation machine, ball mill and shaking table direct drive system, and has realized small batch production. After operation verification, the power saving rate is as high as 50% compared with that of traditional products.
3) energy saving product development: the company will focus on developing energy-saving products such as flywheel energy storage motor and waste heat power generation system in the future.
4) energy storage and other application microgrid systems: the first set of high-power intelligent microgrid energy storage system independently developed and produced by the company was successfully offline and delivered in December 2021.
5) wind turbines: the company is at the forefront of the industry in the market promotion of 6MW and below direct drive, semi direct drive, doubly fed wind turbines, wind power frequency converters, wind power auxiliaries and other supporting equipment. The company will increase the development of leading enterprise customers of wind power machines, which will bring huge supporting markets in the fields of stock wind farm transformation, large-scale wind farm construction, offshore wind farm construction and so on.
6) other products: the company will focus on building high-speed motors, pumped storage motors and other products.
Investment strategy: we believe that Xiangtan Electric Manufacturing Co.Ltd(600416) has very scarce and monopolistic technologies in the two major technical fields of ship integrated electric propulsion and special launch, and is at the three inflection points of industrial trend, mechanism improvement and performance growth.
1. Core competitiveness: the company has two core technologies: ship integrated electric propulsion system and special launch. The product technology and manufacturing capacity are in a leading position outside China, and the market share of related products is 100%. The company has won 6 national special awards for scientific and technological progress, 10 first prizes, 13 second prizes and more than 50 ministerial and provincial invention and innovation awards.
2. Inflection point of industrial trend: in cooperation with the team of well-known academicians, the company has gradually transformed a vehicle mounted special equipment system into serialization and industrialization, and the special launch and ship integrated power system has entered the stage of batch ordering. The inflection point of the huge market has come. In terms of ships, there is still a big gap between the total number of Chinese naval ships and the United States. It is expected that the 14th five year plan will enter a new round of ship mass construction, especially the all electric propulsion ship, which is the latest development direction all over the world and may usher in a large-scale application stage; In terms of on-board special launch system, the company has issued a fixed increase scheme to make positive preparations for the batch production and industrialization of the system. The inflection point of industrial trend is very clear.
3. Inflection point of mechanism improvement: the medium and long-term reward management measures have been issued in 2021. The reward goal is to take the net profit achieved in the highest year in history (217 million yuan) as the reference base for the first implementation of the reward. When the actual annual profit exceeds the base, the medium and long-term reward can be implemented, which is a positive cycle. Therefore, the management mechanism of Xiangdian has been straightened out and the performance release can be expected.
4. Performance release inflection point: the company has stripped Xiangdian wind energy and other loss making assets. In terms of multiple inflection points such as industrial trend and mechanism improvement, we believe that Xiangdian’s performance can continue to grow at a high rate. This year’s Xiangdian is different from any time in the past. It will lead the rise of ship comprehensive electric propulsion and electromagnetic energy. Any equipment landing can bring huge performance flexibility. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 349 million yuan, 650 million yuan and 1012 million yuan respectively, corresponding to 45x, 24x and 15.4x PE, maintaining the “buy” rating.
Risk tip: the price of raw materials rises and the batch production of military products is less than expected.
