\u3000\u3 China Vanke Co.Ltd(000002) 438 Jiangsu Shentong Valve Co.Ltd(002438) )
Event: on April 18, 2022, the company released its annual report for 2021. During the reporting period, the company achieved a revenue of 1.91 billion yuan, a year-on-year increase of 20.45%, and a net profit attributable to the parent company of 253 million yuan, a year-on-year increase of 17.3%, which is basically in line with the previously announced performance express.
Affected by the dual control of energy consumption, it was under short-term pressure in the fourth quarter. The business income of the company decreased slightly by 20.24 billion yuan in the fourth quarter, which was mainly affected by the double control of metallurgy industry, and the business income of the company decreased slightly by 20.24 billion yuan in the fourth quarter. In terms of profitability, the net profit attributable to the parent company in 2021 increased by 17.3% year-on-year and the gross profit margin was 31.23%, down 0.91pct year-on-year compared with 2020, mainly affected by the rise in the price of raw materials. In addition, in 2021, the company's sales expense rate, management expense rate and financial expense rate decreased, and the R & D expense rate increased.
Leading enterprises of nuclear power valves are optimistic about the future development prospect of the company's nuclear power business. Under the background of "carbon neutralization", nuclear power is an important part of base load energy. According to our calculation, according to the blue book of China nuclear energy development report (2020), by 2025 China National Nuclear Power Co.Ltd(601985) the installed capacity is 70 million KW, the construction is about 30 million KW, and the installed capacity of each unit is 10 million KW. The construction of nuclear power is expected to be promoted according to 7-8 units per year from 2022 to 2025. As a leading enterprise in the field of nuclear power ball valves and butterfly valves, the company will fully benefit. In 2021, the company's nuclear power business achieved a revenue of 505 million yuan, a year-on-year increase of 46%, and the nuclear power military industry division added 750 million yuan of orders. It is expected that the nuclear power business will maintain a relatively rapid growth in the next few years.
With the fixed increase funds in place, the production capacity of large special flanges of spent fuel engines may be further improved. According to the reply issued by the CSRC on November 26, 2021, the company privately issued shares to 18 qualified investors at the price of RMB 17.01 per share, raising a net capital of RMB 362 million. The capital will be in place on January 4, 2022. It is expected that after the successful implementation of the project, it will enrich the company's product line of spent fuel reprocessing and large special flange, expand the production capacity of relevant products, and further improve the company's technical strength and leading position. The company has accumulated 370 million yuan of orders in the first 200 ton spent fuel treatment project. At present, it is following up the bidding of the second set of projects. This business is a new incremental business brought by the company after the nuclear power valve business, which will greatly promote the performance in the field of nuclear power in the future.
The metallurgical industry has maintained its leading edge and made breakthroughs in the field of energy and chemical industry. In 2021, the company used old products in the metallurgical field to expand new markets, and new products covered the old markets. The developed blast furnace top equalizing gas recovery technology has been promoted to major steel mills across the country, and the technical transformation of dozens of blast furnaces such as Shagang, Jinxi iron and steel, Changzhi iron and steel has been completed. "Valve housekeeper" project has improved the effectiveness and timeliness of valve spare parts in steel mills and has been widely recognized. In the field of energy and chemical industry, several special valves developed by the company won the bid in Hainan refining and chemical ethylene project, Shenghong, Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Xuyang chemical industry and other projects. In addition, the metal film dust removal technology launched by Ruifan energy conservation, a wholly-owned subsidiary of the company, won an order of 2.827 billion yuan in 2021 (mainly including Handan Iron and steel and Jinxi iron and steel), and the operation effect of the project is good.
Investment suggestion: it is estimated that the company will realize an operating income of RMB 2.48/32.34/4.13 billion and a net profit attributable to the parent company of RMB 3.5/4.7/594 million in 22-24 years, corresponding to 23 / 17 / 13 times of PE. Considering the scarcity of the company in the field of nuclear power valves, maintain the "recommended" rating.
Risk warning: the number of new nuclear power units is less than expected, nuclear safety accident risk, raw material price fluctuation risk and macroeconomic fluctuation risk.
