\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 186 China Railway Construction Corporation Limited(601186) )
Key investment points
Sufficient orders on hand, stable year-on-year growth in revenue and profit, and improved cash flow
The company achieved a year-on-year increase of 264.5 billion yuan in revenue; Our analysis is mainly due to the company’s orders on hand at the end of the year 21 of 4.4 trillion yuan, the order guarantee ratio is as high as 4.3, the steady growth of 22q1, the priority of infrastructure development, and the acceleration of order carry forward. The gross profit margin of 22q1 was 7.3%, with a year-on-year / month on month ratio of – 0.1 / – 5.0pct respectively, and the expense rate during the period was 3.9%, with a year-on-year / month on month ratio of – 0.2 / – 1.6pct respectively. The gross profit margin and expense rate remained stable. The corresponding net profit attributable to the parent company was 5.621 billion yuan, a year-on-year increase of 12.31%, and the performance achieved a good start. 22q1 net operating cash flow was – 41.1 billion yuan, an increase of 9.04 billion yuan over the same period last year, mainly due to the significant increase in the net increase in customer deposits and interbank deposits. The total impairment loss was 630 million yuan, an increase of 130 million yuan year-on-year.
Newly signed: the industrial manufacturing / Infrastructure / survey sector increased steadily, while the real estate sector declined
In terms of total amount, the company achieved 465.9 billion yuan of newly signed contracts in 22q1, yoy + 1.53%. By business: 1) in the engineering contracting sector, the newly signed total was 397.5 billion yuan, with a steady increase of 7%. Among the engineering contracting sector, the newly signed housing construction project was 118.9 billion yuan, with a year-on-year increase of 41%, which was mainly due to the company seizing the opportunities of old city reconstruction and affordable housing construction, driving a high increase in orders. The newly signed contract amount of water conservancy and power projects was 11.7 billion yuan, with a year-on-year increase of 210.26%. We speculate that it may be related to the acceleration of water conservancy construction in 22 years and more bidding projects in 22q1; 2) Non engineering contracting sector, industrial manufacturing / survey and design / material logistics / real estate development and other four business sectors newly signed yoy + 29% / + 4% / – 6% / – 61%, of which the high increase in industrial manufacturing is mainly due to the company’s ability to improve customized and characteristic services for equipment manufacturing, expand large-scale equipment maintenance, remanufacturing and leasing business, and ensure market share; The decline in new signing of real estate development business is mainly due to the company’s initiative to slow down the pace of project listing and sales in order to prevent and control risks.
Comprehensively strengthen infrastructure construction, be optimistic about the company’s annual performance and pay attention to the REIT progress of Chongqing Suining expressway
In terms of industry, at the current time point, steady growth and vigorous infrastructure policies have been issued one after another, and the pace of infrastructure projects may be accelerated in an all-round way. On April 26, the 11th meeting of the central financial and Economic Commission proposed to comprehensively strengthen infrastructure construction and build a modern infrastructure system; On April 29, the meeting of the Political Bureau of the CPC Central Committee called for full expansion of China’s demand, giving play to the key role of effective investment and comprehensively strengthening infrastructure construction. In terms of the company, the number of orders on hand has increased, and the REIT of Chongqing Suining expressway has received feedback from the Shanghai Stock Exchange. By the end of 22q1, the company’s orders on hand were 5.03 trillion yuan, a year-on-year increase of 13.7%. As the “national team” of infrastructure construction, the order carry forward is expected to speed up. On April 26, the company’s Chongqing Suining Expressway REIT project received feedback from Shanghai Stock Exchange. We believe that it is “imminent” to comprehensively strengthen infrastructure construction, expand financing channels and speed up the financing process. The company has more high-quality infrastructure assets and a large amount of potential revitalizing funds, which is expected to benefit. The central finance and Economic Commission meeting proposed to meet the financing needs of infrastructure construction and broaden long-term financing channels. By the end of 2021, the company had a franchise of 60 billion yuan.
Profit forecast and valuation
It is estimated that the company’s operating revenue from 2022 to 2024 will be 1143.8 billion yuan, 1274.8 billion yuan and 1419.8 billion yuan, with a year-on-year increase of 12.14%, 11.46% and 11.37%, corresponding to the net profit attributable to the parent company of 27.501, 30.341 and 33.533 billion yuan, with a year-on-year increase of 11.38%, 10.33% and 10.52%, and corresponding EPS of 203, 2.23 and 2.47 yuan. The current price corresponding to PE is 4.2, 3.8 and 3.4 times. Vertically, the company’s current pe-ttm valuation quantile is only 9% and Pb valuation quantile is only 6%, both at the bottom of history (since the beginning of December); Horizontally, the current market value of the company corresponds to only 4.1 times of PE and 0.56 times of Pb in 22 years, which is 31% and 28% lower than the weighted average of PE and Pb in 22 years of three central enterprises with similar volume, including China State Construction Engineering Corporation Limited(601668) , China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) and other central enterprises. Under the background of steady growth and comprehensive strengthening of infrastructure construction, China Railway Construction Corporation Limited(601186) performance has steady growth, and the current value is undervalued, so it is raised to the “buy” rating.
Risk tip: the growth rate of infrastructure investment is lower than expected; The growth rate of real estate development and sales was lower than expected; The growth rate of logistics trade was lower than expected.
