\u3000\u3000 China Energy Engineering Corporation Limited(601868) (601868)
New orders increased significantly, and new energy and comprehensive transportation performed prominently. The company announced that the total amount of newly signed contracts in 2021 was 872.6 billion yuan, a significant year-on-year increase of 51%. Among them, engineering construction / survey and design / industrial manufacturing / others signed 800.9/119/262/33.6 billion yuan respectively, with a year-on-year increase of 46% / 5% / 161% / 396% respectively. Among the engineering construction orders, traditional energy (thermal power, hydropower, power transmission and transformation, nuclear power, etc.) / new energy and comprehensive intelligent energy (scenery and hydrogen storage, etc.) / urban construction (real estate construction, municipal administration, real estate development) / comprehensive transportation (highway, railway, urban rail, etc.) / other newly signed orders were 2019 / 1928 / 1679 / 1452 / 93.2 billion yuan, with a year-on-year increase of 22% / 53% / 11% / 230% / 48% respectively. Fengguang hydrogen storage and other new energy projects have a high growth rate. It is expected that the company will continue to increase the layout and development of relevant fields mainly due to the accelerated investment in new power systems; The comprehensive transportation performance is bright. It is expected that after the company absorbs and merges Gezhouba, the overall management mechanism will be straightened out, the horizontal competition will be solved, and the resources of the whole group will be concentrated to increase the acceptance of orders in non electric fields. Energy related orders totaled 394.7 billion yuan, accounting for 49% of the total engineering construction orders; Non energy projects account for 51%.
As the UHV leader, the company is expected to benefit from the acceleration of UHV construction in the 14th five year plan. According to China Energy News, during the 14th Five Year Plan period, the State Grid planned to build the “24 AC and 14 DC” UHV project, with a total investment of 380 billion yuan. According to the 2020 social responsibility report issued by the State Grid: by the end of 2020, a total of 26 UHV projects of “14 AC and 12 DC” have been completed and put into operation. There are 38 “24 AC and 14 DC” projects planned and constructed in the 14th five year plan, with a 38% increase over the end of 2020. UHV investment is expected to usher in a rapid growth during the 14th Five Year Plan period. China Energy Engineering Corporation Limited(601868) is the leader of UHV construction, accounting for 74% of the UHV design market (according to the China Energy Engineering Corporation Limited(601868) prospectus), which is expected to significantly benefit from the acceleration of UHV construction in the future.
Invest in the establishment of hydrogen energy and technology subsidiaries, layout and accelerate the transformation in the future. The company announced that it plans to invest 5 billion yuan to establish a wholly-owned subsidiary, China energy construction Hydrogen Energy Development Co., Ltd., to coordinate and lead the development of the company’s hydrogen energy business and build a whole hydrogen energy industry chain and integrated development platform. According to the article published by the chairman of the company on the website of national development and Energy Research Institute, the company has independently developed and EPC constructed a number of projects in the fields of green hydrogen production, hydrogen energy storage and transportation, high-value utilization of hydrogen energy and so on. In the future, the subsidiary will be the main body of the group’s investment and capital operation in hydrogen energy related industries at home and abroad, take the lead in organizing internal and external scientific research forces, focus on five topics: electrolytic water hydrogen production equipment, efficient utilization of by-product hydrogen, liquefied hydrogen storage and transportation, large-scale green hydrogen application and hydrogen energy business model, and comprehensively develop core technologies, equipment and process packages in the whole industrial chain of hydrogen energy production, storage, operation and utilization, And strive to form a demonstration project. In addition, the company also announced to invest 5 billion yuan to establish China energy construction Digital Technology Group Co., Ltd., which plans to build the company’s three platforms of “digital industry development platform, scientific and Technological Innovation Incubation Platform and digital and scientific and technological emerging industry investment platform”, so as to accelerate the company’s informatization and scientific and technological transformation.
Investment suggestion: we estimate that the net profit attributable to the parent company (pro forma) of the company in 21-23 years will be RMB 8.45/95.7/10.97 billion respectively (21 years is the pro forma profit after assuming that the merger of Gezhouba will be completed at the beginning of the year), the comparable caliber will increase by 27% / 13% / 15% year on year, the corresponding EPS will be RMB 0.20/0.23/0.26 respectively, and the corresponding PE of the current stock price will be 13 / 12 / 10 times respectively, maintaining the “buy” rating.
Risk tip: new energy construction fails to meet expectations, infrastructure investment growth fails to meet expectations, and new business progress fails to meet expectations.
