\u3000\u3 China Vanke Co.Ltd(000002) 090 Wiscom System Co.Ltd(002090) )
The company’s performance has been under pressure in 21 years and is expected to return to steady growth in 22 years. On April 11, the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 1.641 billion yuan, a year-on-year decrease of 11.70%; The net profit attributable to the parent company was 145 million yuan, a year-on-year increase of 122.83%; The basic earnings per share was 0.37 yuan, a year-on-year increase of 132.13%. The company’s performance was under pressure in 2021, mainly because the company further focused on its main business, dry new energy and dry China technology were no longer included in the scope of the company’s consolidated statements, and the revenue recognition affected by the epidemic was lower than that in the same period of last year. At present, the company’s asset structure has been optimized and will focus on the two main businesses of smart energy and smart city. The performance is expected to return to steady growth from 22 years.
During the 14th Five Year Plan period, the scale of power grid investment increased significantly, and the company’s smart energy business is expected to benefit. During the “14th five year plan” period, the total investment in the power grid was nearly 3 trillion yuan, an increase of 17% over the “13th five year plan” period. The demand for intelligent transformation of all links of power generation, transmission, distribution and use of the new power system was high. 1) Intelligent power generation: the company has been engaged in the electrical field of power plants and industrial enterprises for more than 20 years. It will fully tap the transformation needs of existing thermal power units of Huaneng, Huadian, Datang and other enterprises, and actively participate in the intelligent operation and maintenance of power plants and the wind power / photovoltaic needs of China Resources, Huaneng, Datang and other enterprises. 2) Intelligent power transmission and Transformation: the company has a full range of products such as relay protection, intelligent monitoring and intelligent operation and maintenance of ultra-high voltage, high voltage and medium and low voltage, and has successfully supplied important customers such as State Grid and South grid. 3) Intelligent power distribution: the newly signed orders of the company have increased greatly compared with 20 years, and a number of new products that meet the needs of distribution network automation have been successfully applied in many provinces and cities, and are expected to continue to contribute to the performance. 4) Power design and integrated operation and maintenance: the company can provide customers in the fields of thermal power, wind, light, power transmission and transformation with one-stop comprehensive energy services of light storage. Several projects have been implemented in the Yangtze River Delta areas such as Nanjing, Changzhou and Tangshan. With the gradual promotion of distributed photovoltaic and wind power, the company is expected to benefit greatly.
Several downstream smart cities contribute to the performance, and the profitability is expected to continue to rise in the future. In 2022, the market size of China’s smart cities is expected to reach 25 trillion, nearly doubling from 14.9 trillion in 2020. The company has the top professional qualification of smart city solutions and services, and has provided comprehensive solutions and services to customers such as more than 500 power enterprises and more than 200 colleges and universities across the country. Affected by the epidemic, part of the company’s general contracting business became subcontracting, resulting in a decline in the gross profit margin of smart city business in 2021; In the future, the company’s smart Internet and digital infrastructure, smart buildings and smart parks, smart transportation and smart security, smart municipal and urban decision visualization and other fields will continue to contribute to the increment, and the company will continue to improve the profitability of smart city business by improving the scale and profitability of software business, refining management throughout the process, reforming performance appraisal and other ways.
Investment suggestion: we predict that the company’s revenue in 2022 / 23 / 24 will be 1.98/24.7/3.21 billion yuan, and the revenue growth rate will be 20.6% / 25.0% / 30.0%; Taking into account the uncertainty of the external environment, the high base effect of the company’s sale of dry new energy and dry China technology, and the fact that dry new energy and dry China technology will no longer contribute operating profits, we lowered the forecast of net profit attributable to the parent company in 2022 / 23 / 24 to RMB 65 / 101 / 157 million, with a growth rate of – 55.0% / 54.8% / 55.0%. Corresponding to the closing price on April 12, the company’s valuation in 2022 is 53x. The company’s smart energy and smart city businesses are expected to grow steadily and maintain the “recommended” rating.
Risk warning: the risk that the power grid investment is less than expected; The risk of epidemic development exceeding expectations.
