\u3000\u3000 Sieyuan Electric Co.Ltd(002028) (002028)
The revenue and profit of 2021 performance express are + 18% and + 30%, which is in line with our expectations. The company released the performance express for 2021. In 2021, the revenue was RMB 8.701 billion, a year-on-year increase of + 18.0%, the net profit attributable to the parent was RMB 1.211 billion, a year-on-year increase of + 29.7%, and the net profit not attributable to the parent was RMB 1.122 billion, a year-on-year increase of + 32.5%. Quarterly, the revenue of 2021q4 was 2.579 billion yuan, a year-on-year increase of + 11.9%; The net profit attributable to the parent company was 322 million yuan, a year-on-year increase of + 219.6%, and the performance express was in line with our expectations.
During the 14th Five Year Plan period, power grid investment increased steadily. We expect structural growth opportunities for UHV, intelligent distribution network, dispatching and energy storage under the background of “new power system”. In 2022, the planned investment of power grid is 501.2 billion yuan, with a year-on-year increase of about 6%, and the investment is at a historical high, reflecting the attribute of reverse cycle regulation and “stable growth” of power grid. A large number of new energy, especially distributed energy, are connected to the grid, the growth of emerging load, and the access of a large number of matching power electronic equipment, which puts forward new requirements for the power grid. In this context, we expect that the power grid investment will tilt towards UHV, intelligent distribution network, dispatching and energy storage.
At the beginning of 2021, the orders were over fulfilled, the structure of EPC outside Shanghai and the elasticity of power generation side were large, the overall steady growth within the network and the structural growth of new categories were high. 1) In terms of total revenue, the company’s revenue in 2021 was 8.7 billion yuan, exceeding the revenue target of 8.5 billion yuan at the beginning of the year; The company’s new order target in 2021 is 10 billion yuan (excluding tax). 2) From the perspective of structure: 1 Overseas EPC contractors are mainly from Asian, African and Latin American countries. After the epidemic in Europe, orders have resumed growth and some products in the United States have broken through; 2. In terms of reactive power compensation products at the power generation side, the company’s SVG product sales market share is leading in China. We expect the SVG revenue to be flat year-on-year. In the medium and long term, with the rapid growth of new energy installation + the proportion of reactive power compensation allocation is expected to increase. We expect that the CAGR of reactive power compensation is expected to reach 30% from 2022 to 2024; 3. The category of switch products has been expanded and maintained rapid growth, among which GIS is moving towards high voltage level and overseas, with a bright growth rate; 4. Coil products grew rapidly, including steady expansion of transformer capacity, multi-point flowering in the State Grid, power generation side and overseas markets, and a large increase in orders; 5. Intelligent equipment has increased steadily, and continue to promote the access of 220kV secondary products in the State Grid bidding.
Under the background of raw material price increase in 2021, the net interest rate attributable to the parent company increased against the trend, reflecting the strong operation and management ability of the company. In 2021, the net profit attributable to the parent company was 13.9%, year-on-year + 1.2pct. We believe that: 1) the impact margin of raw materials in 2021q4 has slowed significantly, and we expect the overall gross profit margin to be basically the same year-on-year in 2021; 2) The company has a high degree of R & D and sales platform and good cost control effect (the cost in 2021 is + 15.15% year-on-year, and the cost rate in the corresponding period is about 14.1%, year-on-year -0.6pct).
Profit forecast and investment rating: we basically maintained the company’s net profit attributable to the parent company from 2021 to 2023 of RMB 1.21 billion, RMB 1.51 billion and RMB 1.8 billion respectively, with a year-on-year increase of + 29.7% / + 24.4% / + 19.5% respectively, corresponding to 29 times, 23 times and 20 times of the current price PE respectively. In 2022, the company will be given 30 times PE, the target price is 59.1 yuan / share, and the “buy” rating will be maintained.
Risk tip: macroeconomic downturn, less than expected power grid investment, intensified competition, etc.
