\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 727 Shanghai Electric Group Company Limited(601727) )
Event: the company released the annual report of 2021. In 2021, the operating revenue was 131388 billion yuan, a year-on-year decrease of 4.30%, and the net profit attributable to the parent company was -9.988 billion yuan, a year-on-year decrease of 365.76%.
The energy sector maintained growth, while the revenue of the integrated services sector fell due to the impact of overseas projects. In 2021, the company’s energy equipment sector maintained a good growth momentum, with an operating revenue of 59.224 billion yuan, a year-on-year increase of 5.83%, mainly due to the rapid growth of wind power equipment sales; The gross profit margin increased slightly by 0.89 PCT to 17.88%. The industrial equipment sector achieved an operating revenue of 42.241 billion yuan, a slight increase of 0.15% year-on-year; The gross profit margin decreased slightly by 0.68 PCT to 16.36%. The integrated service sector achieved an operating revenue of 39.452 billion yuan, a year-on-year decrease of 24.47%, mainly due to the decline in engineering service revenue; The gross profit margin decreased by 5.72 PCT to 6.24% year-on-year, mainly due to the increase in the operating costs of overseas projects and the rise in the prices of raw materials.
Many factors led to a sharp year-on-year decline in net profit. The company’s net profit attributable to the parent company in 2021 decreased significantly by 365.76% year-on-year to -9.988 billion yuan, mainly due to: 1) provision for relevant losses on risk matters of communication companies; 2) The operation cost of overseas projects has increased; 3) The price fluctuation of raw materials leads to the rise of costs; 4) Major losses of some associated enterprises accounted by equity method of the company; 5) Withdraw credit impairment losses on assets related to Evergrande group held by some subordinate enterprises; 6) The provision for goodwill impairment of some subsidiaries is due to six reasons.
Pay attention to the future development of energy equipment (offshore wind power, nuclear power and energy storage). The company’s order scale in the field of energy equipment remained at a high level. In 2021, the new energy equipment orders increased by 61.26 billion yuan, of which the scale of nuclear power and energy storage orders increased rapidly. The new nuclear power orders increased by 19.91% year-on-year from 7.422 billion yuan in 2020 to 8.9 billion yuan in 2021, and the new energy storage orders increased by 119.28% year-on-year from 2.969 billion yuan in 2020 to 6.51 billion yuan in 2021.
The company’s leading position in offshore wind power is stable and will maintain a high-speed growth trend with the rapid development of China’s offshore wind market in the future; The technology in the field of nuclear power remains ahead. In 2021, the company’s comprehensive market share continues to rank first in the industry, and it is expected to maintain its leading edge in the future; Actively explore the energy storage field, horizontally layout various types of energy storage technologies, and vertically explore the upstream and downstream industrial chain of lithium battery energy storage. In the future, the energy storage business is expected to become a new performance growth point of the company.
Maintain the “buy” rating: the company is expected to realize a net profit attributable to the parent company of RMB 2.625/31.48/3.626 billion from 2022 to 2024, corresponding to eps0.05 billion 17 / 0.20/0.23 yuan. The current A-share price corresponds to 23 / 19 / 17 times of PE in 22-24 years, and the H-share price corresponds to 9 / 8 / 7 times of PE in 22-24 years. In 2021, the company was affected by many factors, resulting in the loss of net profit attributable to the parent company, but the impact on the development of subsequent business is limited after the impairment is fully accrued, and it is expected to turn loss into profit in 22 years; As a leading manufacturer of energy equipment (especially offshore wind power and nuclear power) and industrial equipment in China, the company is expected to further improve its market share by taking advantage of its leading advantages under the background of China’s energy structure transformation and industrial structure adjustment. At the same time, with the support of the company’s technological R & D advantages, the energy storage business is also expected to become a new performance growth point of the company and maintain the “buy” rating of a / H shares.
Risk tips: macroeconomic risks caused by covid-19 epidemic and other factors; Overseas business risks caused by geopolitics and other factors; Exchange rate fluctuation risk, etc.
