After stripping off the chemical business, the performance of Zhejiang Communications Technology Co.Ltd(002061) ( Zhejiang Communications Technology Co.Ltd(002061) . SZ) increased significantly in the first quarter of 2022, benefiting from the outlet of “large infrastructure”. At the company’s performance briefing held on May 18, Shen Tu Dejin, general manager of the company, told investors and reporters of the associated press of finance, “In the first quarter, the amount of new orders signed by the company was 9.488 billion yuan, a year-on-year decrease. Mainly due to the impact of the Hangzhou Asian Games, the number of new projects launched by the government decreased. With the extension of the Asian Games, the number of new projects will gradually increase. By the end of the first quarter, the company had nearly 200 unfinished projects, with a cumulative recognized revenue of about 68 billion yuan and an unfinished amount of about 82 billion yuan. The order stock is relatively sufficient.”
Shen Tu Dejin also mentioned that “with the normalization of covid-19 pneumonia epidemic prevention and control, it may have a certain impact on the project progress, construction material supply and transportation of the company’s engineering projects.”
According to the financial report, Zhejiang Communications Technology Co.Ltd(002061) 2021 increased revenue without increasing profit. The company’s revenue increased by 25.37% year-on-year to RMB 46.058 billion, but the net profit attributable to the parent decreased by 2.91% year-on-year to RMB 968 million; In the first quarter of this year, the company achieved revenue and net profit attributable to the parent company of 9.745 billion yuan and 364 million yuan respectively, with a year-on-year increase of 38.86% and 280.8%.
It is worth noting that the cash content of the company’s net profit in 2021 and the first quarter of 2022 is low, which are 0.39 and -8.7 respectively In addition, the company’s return on net assets (ROE) fell from 10.74% last year to 3.7% at the end of the first quarter of this year. Zhao Junwei, the company’s financial principal and acting board secretary, explained to investors: “the negative cash flow in the first quarter is mainly the result of the comprehensive effect of factors such as the continuous growth of the company’s business scale and the long project payment collection cycle.”
At the end of 2021, Zhejiang Communications Technology Co.Ltd(002061) transferred 100% of the equity of Jiangning company and Dafeng company to Zhenhai Refining and Chemical Co., Ltd., and completely withdrew from the chemical industry, leaving only the infrastructure business. Zhao Junwei, the person in charge of Finance and Acting Secretary of the company, said that the 100% equity transfer funds of Dafeng company and Jiangning company in the chemical sector of the company have been included in the first quarter report.
In the face of favorable policies such as “large infrastructure” and “common prosperity”, Zhao Junwei said that in the future, the company plans to build a new pattern of “investment construction maintenance” industrial chain integration of transportation infrastructure and build a relatively diversified layout of business forms by focusing on the main business of infrastructure construction and by means of M & A and acquisition of upstream and downstream industries related to the main business.
In addition to Chinese projects, Chairman Wu Wei also pointed out that “at present, the company has implemented engineering projects in 19 countries. In the future, it will actively respond to the national ‘the Belt and Road’ initiative and continue to explore overseas markets.”
In addition to the performance, the focus of investors on the company is also focused on the stock price. Some investors put forward: “the performance of Zhejiang Construction Investment Group Co.Ltd(002761) ( Zhejiang Construction Investment Group Co.Ltd(002761) . SZ) is not as good as that of Zhejiang Communications Technology Co.Ltd(002061) and why Zhejiang Construction Investment Group Co.Ltd(002761) shares have risen all the way, and the market value has been three times that of the company?” Zhao Junwei said that the company’s secondary market share price is affected by multiple factors and believes that the secondary market share price will truly reflect the company’s value in the future.
The financial Associated Press reporter noted that Zhejiang Communications Technology Co.Ltd(002061) issued a suggestive announcement on the possibility that “Jiaoke convertible bonds” may meet the redemption conditions the day before the performance meeting. At the performance meeting, many investors asked “whether the company has submitted a plan to redeem convertible bonds” and “whether the company has enough funds to redeem”. In this regard, Wu Wei responded that at present, the company has not triggered the redemption terms of convertible bonds. If it is triggered later, the company will decide whether to exercise the redemption right in combination with the actual situation and according to the decision-making opinions of the internal authorities.
In April 2020, Zhejiang Communications Technology Co.Ltd(002061) issued 2.5 billion yuan of convertible bonds, which were listed in May of that year. It is understood that the current conversion price is 5.24 yuan / share. As of May 12, 2022, the remaining convertible bond balance of “Jiaoke convertible bond” is about 1.428 billion yuan, with a conversion rate of 43%.
