\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 669 Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) )
Event: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) announcement: from January to April 2022, the newly signed contract amount of the company was about 333.8 billion yuan, a year-on-year increase of + 23%; Among them, the amount of newly signed contracts between China and foreign countries was about 282.4/51.4 billion yuan, a year-on-year increase of + 31% / – 5%.
Comments:
Single month order growth accelerated significantly, mainly from the contribution of energy and power business: in April 22, the newly signed contract amount of the company was about 86.3 billion yuan, a year-on-year increase of + 121%; From a regional perspective, it is mainly driven by China’s growth: the amount of newly signed contracts between China and foreign countries is about 83.1/3.2 billion yuan, a year-on-year increase of + 146% / – 39%. In terms of business, the newly signed contracts for energy, electricity, water resources and environment, infrastructure and other businesses in April of 22 were 634 / 37 / 282 / – 9 billion yuan respectively (the newly signed contracts for other businesses from January to April were 9 billion yuan lower than those from January to March), accounting for 73% / 4% / 33% / – 10% of the total newly signed contracts respectively. In April 22, the company’s newly signed contract amount increased significantly, mainly due to the rapid volume of newly signed contract amount of energy and power business; In April, the newly signed contracts of energy and power business: 1) the proportion in the total newly signed contracts increased by 50pcts compared with the previous month (the proportion was 23% in March); 2) Amount + 119% month on month; 3) The number of newly signed projects was + 482% (867 newly signed projects in April).
Strong demand for energy and power projects, or benefit from the “steady growth” policy: in April of 22, the newly signed contract amount of the company’s energy and power business was about 73 million yuan for a single project, and 45 / 0.58/194 million yuan respectively in January, February and March of 22. Therefore, it is judged that the increase in the newly signed contract amount in the energy and power field of the company in April did not come from individual large orders, but from the release of the demand of multiple small orders. Strong demand in the field of energy and power may benefit from the “steady growth” policy. 22 years from March to April, under the background of frequent outbreaks in China, the necessity of “steady growth” increased; At the end of April, the central government raised the importance of infrastructure investment to the strategic level of national security, and pointed out that the main direction of this round of infrastructure investment is the construction of water network, road network and energy network. Combined with the fact that the orders of central enterprises such as China State Construction Engineering Corporation Limited(601668) , China National Chemical Engineering Co.Ltd(601117) , etc. increased against the trend in April 22, and the investment growth rate of each sub industry in the infrastructure field within the scope of the Bureau of statistics maintained strong toughness (positive growth in each month), it is judged that the force of the “steady growth” policy has been transmitted to the enterprise level, and the momentum of the infrastructure industry chain is heating up against the trend.
Profit forecast, valuation and rating: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) 22 in April, the growth of newly signed orders accelerated significantly, especially the demand in the field of energy and power showed a concentrated release trend. It is judged that the force of the “steady growth” policy has been transmitted to the enterprise level, and the prosperity of infrastructure investment is heating up against the trend. The company has profound accumulation in the field of energy and power engineering, and will benefit from the construction of energy network by the state under the background of “stable growth”. At the same time, we are also optimistic about the company’s business development in the field of new energy power generation operation during the 14th five year plan period. Maintain the company’s EPS forecast of 0.65 yuan, 0.72 yuan and 0.82 yuan from 2022 to 2024. The current price corresponds to the company’s 22-year dynamic P / E ratio of 12x, maintaining the “buy” rating.
Risk tips: the demand for contracted construction of new energy power generation projects is lower than expected, the growth rate of newly signed orders slows down, the project payment collection is lower than expected, the profit level of real estate business is lower than expected, and the epidemic disturbance affects business activities.
