\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 82 Dongfang Electronics Co.Ltd(000682) )
Event overview
On April 22, 2022, the company disclosed its 2021 annual report. In 2021, the company realized an operating revenue of 4.486 billion yuan, a year-on-year increase of 19.38%; The net profit attributable to the parent company was 348 million yuan, a year-on-year increase of 23.12%.
Analysis and judgment:
The performance growth is in line with expectations, the intelligent distribution network has a bright growth, and is optimistic about the distribution network + meter two wheel drive for a long time
The company’s revenue and performance growth in 2021 are in line with our expectations, which is significantly faster than that in previous years, confirming the high prosperity of the company’s business. By product:
1) the power grid automation system (intelligent distribution network) grew the fastest, with an annual revenue of 1.788 billion yuan, a year-on-year increase of 23.85%; Under the background of the marginal increase of intelligent distribution network investment in the 14th five year plan, it is confirmed that the company fully enjoys the growth of the industry β。
2) the growth rate of intelligent power and energy information management system (smart meter) was slightly lower than expected, and the annual revenue was 1.383 billion yuan, a year-on-year increase of 14.32%. In terms of State Grid bidding, according to the announcement of major contracts of the company, the total bid winning amount of the subsidiary Weston in the bidding and procurement of state grid energy meters in 2021 reached 790 million yuan, significantly higher than 568 million yuan in 2020, and the bid winning amount of single batch and annual reached a record high. In terms of digital scheme promotion, from 17 provinces and 37 cities in 2020 to 60 cities in 20 provinces. In terms of overseas market development, it won the bid for Nepal’s national power data center and power dispatching system project, creating a new high in the single contract amount of Weston overseas general contracting project; Complete the development of normalized single-phase and three-phase electricity meters and expand the coverage of overseas markets. In conclusion, we continue to be optimistic about the growth of the company’s smart meter business.
Maintain the dominant position of China Southern Power Grid, continue to expand the share of the State Grid, and achieve breakthroughs in the field of power grid marketing in both networks
China Southern Network: it has comprehensively undertaken the construction of China Southern network mobile marketing; Winning the bid for the modular self reconfiguration emergency minimum dispatching automation system of the South Power Grid general dispatching office, realizing the scientific and technological innovation of the general dispatching automation office, and providing technical standards for the subsequent power grid promotion; In the bidding of OS2 master station software framework of Guangdong power grid, 11 Municipal Bureau master station systems were won, ranking first; In the framework bidding of Guangzhou distribution terminal, the bid winning amount ranked first; The products of ring network cabinet and transformer have achieved new breakthroughs in the Southern Power Grid Market; The primary and secondary integration intelligent equipment has successively won the bid for projects in Yunnan, Guangdong, Guangxi and other regions.
State Grid: become the core development team of State Grid marketing 2.0; It has developed the business of auxiliary control station end system and remote intelligent inspection system of State Grid Substation, and the product has been successfully operated in 1000kV UHV substation for the first time; Distribution network Siasun Robot&Automation Co.Ltd(300024) and other intelligent dispatching products were successfully launched in Qingdao, Hunan and Zhejiang, opening up the State Grid Market.
Continue to innovate and develop, actively distribute the energy storage field and seek new growth points
In 2021, the company invested 383 million yuan in R & D, with a year-on-year increase of 18.37%, accounting for 8.54% of operating revenue. The main projects under research include the research and development of energy storage PCs products. At present, the module assembly and control panel commissioning have been completed, and the function realization of the module is under way. In terms of strategy, the company quickly cut into the diversified application of the new energy storage system on the power supply side, power grid side and user side through various modes such as product, capital and EPC, and carried out industrial layout and expansion through pilot and demonstration projects in different application scenarios. The new layout is expected to bring incremental flexibility to the company’s performance.
Investment advice
The company’s business products are fully benchmarked with Nari. During the 14th Five Year Plan period, with the increased and accelerated investment of State Grid and South grid, we believe that the company’s performance will continue to grow. According to the company’s annual report, we maintain the company’s revenue forecast of 5.34/6.61 billion yuan for 22-23 years, and add 8.19 billion yuan for 24 years; Maintain the forecast of net profit attributable to parent company for 22-23 years of RMB 452 / 625 million, and increase the forecast of net profit attributable to parent company for 24 years to RMB 805 million; Maintain the forecast of earnings per share (EPS) of 0.34/0.47 yuan for 22-23 years and 0.60 yuan for 24 years, corresponding to the closing price of 5.06 yuan / share on April 22, 2022. PE is 15 / 11 / 8 times respectively. It is highly recommended to maintain the “buy” rating.
Risk tips
1) market share is squeezed by competitors; 2) The investment of State Grid and South grid is less than expected; 3) New business expansion is less than expected; 4) Systemic risks caused by economic downturn; 5) Manage risk.
