\u3000\u3000 Sichuan Road & Bridge Co.Ltd(600039) (600039)
The annual performance exceeded 5 billion, slightly exceeding expectations, and is expected to accelerate expansion under the trend of steady growth. The company predicts that the net profit attributable to the parent company will reach 5.03 billion yuan in 2021, an increase of 66% at the same time; The net profit attributable to the parent company after non deduction was 4.87 billion yuan, an increase of 65% at the same time. Among them, Q4 realized a net profit attributable to the parent company of 1.56 billion yuan in a single quarter, an increase of 20% at the same time. The annual performance growth in 2021 was slightly higher than expected, mainly due to the following reasons: 1) the company continued to explore the market and increased high-quality projects; 2) Improve project management level, actively reduce cost and increase efficiency, and improve project profitability; 3) Under the background of rising raw material prices, accelerate contract management such as project change and material difference adjustment, and increase profits; 4) There are sufficient orders on hand and the transformation to revenue continues smoothly. According to the previous draft of the company’s restricted equity incentive plan, the company plans to deduct non performance of RMB 7 / 8 / 9 billion respectively from 2022 to 2024, with a compound growth rate of 21% in three years; The revenue is RMB 100 / 110 / 120 billion respectively, and the compound growth rate in three years is expected to be about 15%. During the “14th five year plan” period, Sichuan Province plans to complete an investment of more than 1.2 trillion in comprehensive transportation construction, including 700 billion yuan for roads and waterways and 300 billion yuan for railways, which are 20% / 40% / 30% higher than the target of the “13th five year plan” respectively. At a time when the downward pressure on the economy is increasing and the expectation of stable growth of infrastructure is increasing, the major projects of the “14th five year plan” in Sichuan Province are expected to accelerate, Shudao group, the major shareholder of the company, accounts for more than 80% of the provincial highway investment market, which is expected to help accelerate the growth of the company’s main business.
The goal of newly signed orders was completed on schedule, and the improvement of scale and efficiency drove the company’s continuous growth. In 2021, the company signed 100.2 billion yuan of new orders, a significant increase of 153% year-on-year. The target of 100 billion yuan of new orders planned in the financial budget at the beginning of the year was completed as scheduled. Among them, the newly signed orders of Q4 were 44.1 billion yuan, a significant year-on-year increase of 256%. In terms of sectors, new orders for infrastructure projects / housing construction in the whole year were 91.3/88 billion yuan, an increase of 155% / 214% at the same time. From the perspective of individual scale, in 2021, the company signed 244 projects in total, and the scale of individual orders was 410 million yuan, which was significantly higher than 130 million yuan in 2020. It is expected that after the merger of major shareholders of the company, the voice in the province will increase and the contracting capacity of large projects will increase. At the same time, we expect that the competition in the provincial highway market is expected to ease, the profitability of the project is expected to improve, and the two wheel drive of scale and efficiency is expected to promote the leapfrog development of the company in the 14th five year plan.
The 1 + 3 industry continues to be laid out, and the highlights of lithium battery business are prominent. During the “14th five year plan” period, the company plans to build a 1 + 3 industrial pattern with infrastructure business as the core and energy, resources, transportation + service coordination. In terms of infrastructure, the company plans to issue shares and pay cash to purchase 100% of Anhui Gourgen Traffic Construction Co.Ltd(603815) shares, 100% of high road construction and 96.67% of high road greening shares of Shudao group to solve the problem of horizontal competition. By integrating the engineering construction assets of major shareholders, it is expected to consolidate the leading position of the company in transportation infrastructure construction in the province and continuously improve the market share. In terms of clean energy, the company has built hydropower projects in Sichuan Bahe and balang river basins. During the “14th five year plan” period, the installed capacity of wind power and Optoelectronics is expected to exceed 5 million KW. In terms of lithium business, the company has many layouts: 1) it plans to introduce Sichuan energy investment group and Byd Company Limited(002594) as strategic investors to bind the upstream and downstream industrial chain; 3) Sichuan New Energy Power Company Limited(000155) intends to transfer its 5% equity of Sichuan energy investment Lithium Industry Co., Ltd. to Sichuan Road & Bridge Co.Ltd(600039) ; 2) It is proposed to invest about 100 million yuan to participate in the public recruitment of investors in the bankruptcy reorganization of Huidong Jinchuan Phosphorus Chemical Co., Ltd; 4) It is proposed to establish a joint venture with Sichuan New Energy Power Company Limited(000155) , Byd Company Limited(002594) and Hefeng company to comprehensively develop the phosphate rock resources and lithium iron phosphate project in Mabian county. As the company not only complements the short board of lithium ore, phosphate ore and other resources, the production of lithium cathode materials and precursors of the company is expected to accelerate and create a new growth point.
Investment suggestion: we expect the net profit attributable to the parent company from 2021 to 2023 to be 5 / 71 / 8.6 billion yuan respectively, with a year-on-year increase of 66% / 41% / 22%, EPS of 1.05/1.48/1.81 yuan respectively, and the corresponding PE of the current stock price is 10.1/7.2/5.9 times respectively, maintaining the “buy” rating.
Risk tips: order conversion is not as expected, policy promotion is not as expected, new business development is not as expected, infrastructure investment in the province is not as expected, etc.
