\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 800 China Communications Construction Company Limited(601800) )
Matters: 1) the company announced that it had signed the agreement of intent on major asset restructuring with Gansu Qilianshan Cement Group Co.Ltd(600720) and its related parties, urban and rural China, which agreed that China Communications Construction Company Limited(601800) planned to replace 100% of the equity of the Institute of public planning, the first public hospital and the second public hospital, and urban and rural China (a member of the controlling shareholder CCCC group) planned to replace 100% of the equity of Southwest Institute, Northeast Institute and Energy Institute with all the assets and liabilities of Gansu Qilianshan Cement Group Co.Ltd(600720) , The insufficient replacement part Gansu Qilianshan Cement Group Co.Ltd(600720) will be purchased from China Communications Construction Company Limited(601800) , urban and rural China by issuing shares. 2) The company announced the new orders signed in the first quarter.
Upon completion of the transaction, it is expected that China Communications Construction Company Limited(601800) and urban and rural China will become Gansu Qilianshan Cement Group Co.Ltd(600720) controlling shareholders. According to the disclosure of the annual report, China Communications Construction Company Limited(601800) plans to inject the public Planning Institute, the first public institute and the second public institute, which are the leading enterprises in China’s Highway Survey and design, with net profits of 530 / 570 / 530 million yuan respectively in 2021, totaling 1.63 billion yuan. Referring to the China Design Group Co.Ltd(603018) valuation level of comparable companies (9 times of pe9 in 21 years), the overall valuation of the three design companies is 14.7 billion yuan. If we consider the valuation of Southwest Institute, Northeast Institute and Energy Institute to be injected into China’s urban and rural areas, the total price of the six injected design companies is expected to be more than 14.7 billion yuan Gansu Qilianshan Cement Group Co.Ltd(600720) currently has a market value of 8.3 billion, and the difference between the market value and the injected assets will be made up by issuing additional shares to China Communications Construction Company Limited(601800) , urban and rural areas of China. Therefore, after the completion of the transaction, it is expected that China Communications Construction Company Limited(601800) and urban and rural China will become the controlling shareholders of Gansu Qilianshan Cement Group Co.Ltd(600720) and the cement assets of the former Gansu Qilianshan Cement Group Co.Ltd(600720) are expected to become the subordinate businesses of China Communications Construction Company Limited(601800) group.
Realize the spin off and listing of subsidiaries and actively practice the reform of state-owned enterprises. If this transaction is completed, it will be of great significance to China Communications Construction Company Limited(601800) and CCCC: 1) under the background of the three-year action plan for the reform of state-owned enterprises, this transaction realizes the spin off and listing of subsidiaries, improves the overall asset securitization rate of the group and actively implements the reform of state-owned enterprises. 2) It realizes the separate listing of Highway Survey and design, municipal design, energy design and other businesses, provides a better financing platform, and can concentrate resources to accelerate the development of relevant businesses. 3) It is expected to obtain the cement business and further improve the industrial chain layout of the group.
Q1 the newly signed contract reached a new high on the high base and performed brilliantly. The company announced that the newly signed contract amount in 2022q1 was 430.7 billion yuan, a year-on-year increase of 4.9% and a month-on-month increase of 65% over 21q4. On the basis of the high increase in the same period last year (21q1 order yoy + 80%), the order amount hit a new high in a single quarter, accounting for 30% of the annual order target, achieving a “good start” in the first quarter. In terms of business, the total newly signed contract amount of infrastructure construction was 379.3 billion yuan, an increase of 5.9% at the same time, of which the orders of ports / roads and bridges / railways / urban construction / overseas projects changed by + 42.9% / + 14.6% / – 9.6% / – 0.3% / + 4.9% year-on-year respectively, and the traditional business and cash exchange projects of “big transportation” increased significantly. The newly signed contracts for capital construction design / dredging engineering / other businesses are RMB 16.5/32.5/2.4 billion, yoy + 25.2% / – 10.5% / – 18.7%. From a subregional perspective, the amount of newly signed contracts in China was 369 billion yuan, an increase of 4.8% at the same time; New overseas contracts amounted to 61.6 billion yuan, an increase of 5.7% over the same period. In the first quarter, the total investment estimate of the company’s newly signed infrastructure and other investment projects was 70.94 billion yuan, of which the contract amount confirmed according to the company’s share ratio was 45.03 billion yuan, and the construction and installation contract amount that can be undertaken in the design and construction link is expected to be 40.03 billion yuan.
Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be 21.2/241/27 billion yuan respectively, with a year-on-year increase of 18% / 14% / 12%, EPS of 1.31/1.49/1.67 yuan respectively, and the corresponding PE of the current stock price is 7.0/6.2/5.5 times respectively, maintaining the “buy” rating.
Risk tip: the risk of incomplete asset replacement transaction, unreasonable asset valuation assumption, change risk of trading scheme, lower than expected strength of steady growth policy and repeated epidemic risk.
