\u3000\u3 China Vanke Co.Ltd(000002) 531 Titan Wind Energy (Suzhou) Co.Ltd(002531) )
The company’s performance increased steadily in 2021. On April 12, 2022, the company released its annual report for 2021. The annual operating revenue was 8.166 billion yuan, a year-on-year increase of + 1.42%, and the net profit attributable to the parent company was 1.310 billion yuan, a year-on-year increase of + 24.76%. Excluding the non recurring gains and losses such as the investment income from the reduction of Shenzhen Cotran New Material Co.Ltd(300731) shares during the year, the company realized a net profit of 1.075 billion yuan, a year-on-year increase of + 9.91%.
The production capacity of wind tower and blade is expanding rapidly, and the profitability is expected to be repaired. In 2021, the installed capacity of onshore wind power in China decreased significantly. The company achieved 626000 tons of wind tower sales, an increase of 6.1% against the trend, and the blade revenue was 1.781 billion yuan, a year-on-year decrease of 17.6%. During the 14th Five Year Plan period, China’s tower market is expected to be concentrated. The company actively expands in line with the market trend. At present, the total tower capacity is about 900000 tons. After the three production bases under construction in Qian’an, Jingmen and Beihai are put into operation, the total capacity will reach 1.2 million tons. Meanwhile, in 2021, the company’s blade business will also complete the site selection of bases in Inner Mongolia, Northeast China, central China and other places, and will expand synchronously with the tower business in the future. In 2021, the prices of steel, resin and other raw materials in China increased significantly, and the overall profit of the company’s equipment manufacturing sector was under pressure. The annual gross profit per ton of wind tower was about 100000 yuan, a decrease of 0500 yuan compared with 2020, and the gross profit margin of blades was 17.0%, a year-on-year decrease of 4.3%. Considering that the price of tower and blade has partially conducted the fluctuation of raw material cost in 2022, we expect that the profitability of the company’s tower and blade will be repaired to a certain extent this year.
The development of new energy development sector has accelerated, “manufacturing + zero carbon” two wheel drive. At the end of 2021, the company’s cumulative scale of grid connected wind farms was 884mw, and the power generation revenue reached 1.051 billion yuan in 2021. The new energy development business has become an important factor driving the growth of the company’s performance. In 2021, the company successively signed cooperation agreements with Qian’an, Jingmen, Shayang and other local governments to actively participate in the development and construction of local new energy projects. Since the second half of 2021, the company has successively obtained the development right of 500 MW wind power project in Ulanqab city and the construction index of 600 MW new energy project in Hubei Province. In the future, the company will continue to invest in “zero carbon” business and actively explore new models such as asset light service. We expect that the new energy development business will have a good synergy with the tower and blade business. The company is gradually forming a business pattern of “equipment + zero carbon” two wheel drive.
Investment suggestion: we expect the company to achieve an operating income of 11.7/15.3/18.4 billion yuan and a net profit attributable to the parent company of 1.57/22.0/2.73 billion yuan respectively from 2022 to 2024. It is rated as “Buy-A” investment, with a six-month target price of 16 yuan, corresponding to 18 times the P / E ratio in 2022.
Risk tips: the installed capacity of wind power in China is less than expected, the price of raw materials rises, market competition intensifies, etc
