\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 502 Anhui Construction Engineering Group Corporation Limited(600502) )
Key investment points
Event: the company released the first quarterly report of 2022. In the first quarter of 2022, the operating revenue was 14.53 billion yuan, a year-on-year increase of 3.0%, and the net profit attributable to shareholders was 312 million yuan, a year-on-year increase of 7.2%, and eps0.5% 18 yuan.
The performance of the first quarter improved steadily as scheduled. In 2022, the company achieved an operating revenue of 14.53 billion yuan in Q1, with a year-on-year increase of 3.0%, and a net profit attributable to the parent of 310 million yuan, with a year-on-year increase of 7.2%. The revenue and net profit attributable to the parent still achieved a positive year-on-year increase on the basis of the higher than expected growth in Q1 last year. In the first quarter, the gross profit margin was 10.8%, with a year-on-year increase of 1.6pp; The net interest rate was 2.8%, with a year-on-year increase of 0.2pp; The expense rate during the period was 7.7%, with a year-on-year increase of 1.7pp. The overall performance improved steadily as scheduled.
Benefiting from the rapid rebound of infrastructure investment, the company’s orders are expected to maintain a high increase. In 2021, the company accumulated 385 newly signed projects, with an amount of 75.904 billion yuan, a year-on-year increase of 21.00%. The company signed 32.99 billion yuan of new orders in the first quarter, an increase of 85.13% year-on-year. Among them, the newly signed contract amount of infrastructure projects was 20.86 billion yuan, a year-on-year increase of 81.9%; The newly signed contract amount of housing construction projects was 11.98 billion yuan, a year-on-year increase of 89.4%, and the growth rate of orders significantly exceeded expectations. Since 2022, the “steady growth” policy has continued to work. In the first quarter, the total amount of fixed asset investment reached 10.5 trillion, an increase of 9.3% year-on-year, of which the total investment in infrastructure increased by 10.5% year-on-year, significantly higher than the target growth rate of GDP in 2022. The company is expected to benefit from the catalytic policy.
In 2022, Anhui’s infrastructure investment plan ranks first in China, and the company has great development potential. On February 15, 2022, Anhui issued the investment plan for key projects in Anhui Province in 2022, with a planned investment of more than 1.66 trillion yuan, a year-on-year increase of 11.8%, involving many fields such as strategic emerging industries and upgrading of traditional industries. It was clearly proposed to increase the construction of transportation, energy and other projects and carry out infrastructure investment in an appropriate way in advance. Superimposed on the previously announced number of projects, Anhui Province currently has a total of 8897 construction projects. In 2022, it ranked first in the country with a total investment of 1.7 trillion and a total investment of 7.7 trillion. According to statistics, among the listed companies related to infrastructure construction in Anhui Province, Anhui Construction Engineering Group Corporation Limited(600502) and its related enterprises involve more than 10 key projects, with a total investment of more than 10 billion, ranking first, with great development potential.
Increase the layout of assembly industry, and the development of new business can be expected. The relevant top-level policy framework of prefabricated buildings has gradually matured. As the future of the construction industry, the development trend of prefabricated buildings is very clear under the background of increasing environmental protection requirements and aging population. Closely following the national policy guidance, the company vigorously develops the prefabricated construction business. In 2014, the company began to invest in the construction of prefabricated production bases. Five operation bases have been completed and put into operation, one base under construction and two in preparation. The prefabricated construction base operated smoothly. In 2021, there were 3 new production bases and 5 new production and operation bases. In the whole year, 755 million yuan of new orders were signed, an increase of 238% year-on-year. At present, the company has obtained the core competitiveness in the field of prefabricated buildings, formed the advantages of the integration of design, development, construction and logistics of prefabricated buildings, and has outstanding cost control ability.
Profit forecast and investment suggestions. It is estimated that the company’s net profit attributable to the parent company will grow at a compound growth rate of 18.8% in three years from 2022 to 2024. The company’s 2022 performance pe10 times comparable valuation, corresponding to the target price of 7.70 yuan, is given a “buy” rating for the first time.
Risk warning: the risk of large macroeconomic fluctuations, the risk of infrastructure investment falling short of expectations, and the risk of order growth falling short of expectations.
