\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 669 Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) )
The company recently announced the 2022 plan for non-public development of A-Shares (hereinafter referred to as the “fixed increase plan”), which plans to raise a total of no more than 15 billion yuan. The fixed increase plan has been deliberated and approved at the meeting of the board of directors of the company. In the follow-up, it needs to be approved by the SASAC, the general meeting of shareholders of the company and the CSRC. The raised funds are intended to be used for several types of projects: 1) a total of 5.5 billion yuan (vs. a total investment of 15.959 billion yuan) is proposed to be invested in high-quality engineering contracting projects, including the general contracting project of urban rail construction in the Pearl River Delta and the 350MW offshore wind power EPC project in Vietnam; 2) The investment and operation projects in the field of strategic development plan to invest 4 billion yuan (vs. the total investment of the project is 9.053 billion yuan). The corresponding project is Yunyang Jianquan pumped storage power station project (with a total installed capacity of 1.2gw), excluding the preparation period. The total construction period of the project is 6.5 years. After the project is completed, it mainly undertakes the tasks of peak shaving / valley filling / energy storage / frequency modulation / phase modulation / emergency standby of Chongqing power grid. The company calculates that the financial internal rate of return of the project capital is 6.5%; 3) Offshore wind power survey and construction business equipment procurement projects are planned to invest 1 billion yuan (vs. the total investment of the project is 1.34 billion), including the purchase of offshore wind construction and installation business equipment (crane ship, offshore crane and fan hoisting platform) and 75 meter water depth offshore jack up survey and test platform; 4) To replenish working capital and repay bank loans, it is planned to invest 4.5 billion in the raised funds.
Recently, the company also announced the newly signed contract amount in April 22 years ago. The newly signed contract amount of 22m1-4 was 333.8 billion, yoy + 23% (vs22q1 247.6 billion, yoy + 7%). Among them, energy, electricity, water resources and environment, and infrastructure signed 114.5 billion, 98.8 billion and 116.8 billion respectively. We estimate that the newly signed contract amount in April is 86.3 billion, yoy + 121%. We are optimistic about the sustainability of the follow-up.
Promote the implementation of the company’s new energy transformation and seize the development opportunities of the industry
Since 21h2, the company has focused on promoting asset restructuring with the group. By the end of 22 / 04, the change of shareholders who put in and put out assets, industrial and commercial registration and asset delivery have been completed. The company has successfully realized the stripping of real estate business and solved some of the group’s horizontal competition issues. We believe that, on the one hand, the important significance of completing the divestiture of the real estate business lies in clearing the obstacles of the company’s equity refinancing and improving the company’s ability to interact with the capital market. The company recently announced the fixed increase plan, which shows that the company has more efficient execution. On the other hand, the main business of the company’s traditional engineering is capital intensive. At the same time, the company also needs high-intensity investment expenditure to vigorously promote the transformation of new energy (investment in wind power, photovoltaic and pumped storage. The company plans to invest 52.2 billion in energy projects in 21 years, including 48.3 billion in new energy projects). We think it is necessary for the company to consolidate its balance sheet through equity financing.
The investment direction of fund-raising reflects the transformation ideas of the company, is optimistic about the growth prospects of the company, and maintains the “buy” rating
In combination with the company’s fixed increase plan, the raised funds are intended to be used for the construction of flow supplement and infrastructure projects. In addition, the investment in pumping and storage projects and the improvement of offshore wind engineering capacity (Vietnam 350MW offshore wind power EPC project + offshore wind power survey and construction business equipment procurement projects) are the key investment (the raised funds to be used are 4 billion and 2.5 billion respectively, accounting for 27% and 17% of the total funds to be raised respectively). Combined with the company’s “14th five year plan” clean energy transformation idea, in addition to wind power / photovoltaic investment, pumping and storage investment and construction and sea wind project are also the focus of follow-up development. The company has good early accumulation and is optimistic that the two businesses support the transformation prospect of the company, and there have been positive changes in the level of newly signed orders. Maintain the forecast of the company’s net profit attributable to the parent company for 22-24 years of 11 / 126 / 14.5 billion, yoy respectively 27% / 15% / 15%, maintain the target PE of about 16x for 22 years, maintain the target price of 11.18 yuan, and maintain the “buy” rating.
Risk warning: strategy execution is lower than expected, power and infrastructure investment is lower than expected, impairment risk, and there is uncertainty about the promotion rhythm and implementation of fixed increase scheme
