\u3000\u3000 China Railway Hi-Tech Industry Corporation Limited(600528) (600528)
Events
The company announced the signing of major contracts. The total amount of new contracts signed by the company in 2021 reached 46.81 billion yuan, a year-on-year increase of 11.9%.
Key investment points
The growth rate of new orders signed by the company is in line with expectations, and the acceleration of “steady growth” infrastructure projects is expected to bring about a rebound in the growth rate of new orders
In 2021, the total amount of new contracts added by the company was 46.8 billion yuan, a year-on-year increase of 12%, which was in line with the expectation as a whole. According to the statistics of regional distribution, the total amount of new contracts signed by the company in 2021 was 44.7 billion yuan, a year-on-year increase of 14%, accounting for about 95%; The total amount of newly signed overseas contracts was 2.1 billion yuan, a year-on-year decrease of 14%, accounting for only 5%. Under the background of “steady growth” policy, it is expected that the approval and construction of new infrastructure projects around the country are expected to accelerate, and the newly signed contract amount of the company is expected to accelerate in 2022.
According to the statistics of business types, the total amount of newly signed contracts for special construction machinery and equipment and related services in the whole year was 15 billion yuan, a year-on-year increase of 5%, accounting for 32%. Among them, the newly signed contract amount of tunnel construction equipment and related services was 12.9 billion yuan, a year-on-year decrease of 0.9%; The newly signed contract amount of engineering construction machinery and related services was 2.1 billion yuan, a year-on-year increase of 68%. The total amount of newly signed contracts for transportation equipment and related services of the company was 29 billion yuan, a year-on-year increase of 14%, accounting for 62%. Among them, the newly signed contract amount of turnout business was 6.5 billion yuan, a year-on-year decrease of 13%; The newly signed contract amount of steel structure manufacturing and installation business was 22.6 billion yuan, a year-on-year increase of 25.4%; The total amount of newly signed contracts for other businesses was 2.8 billion yuan, a year-on-year increase of 28%, accounting for 6%.
In the first half of 2021, the company completed the newly signed contract amount of 22.3 billion yuan, a year-on-year increase of 31%. The main reason is that the steel structure manufacturing and installation business benefited from winning the bid for national key projects such as Changtai Yangtze River Bridge, Longtan River crossing bridge and Nanjing Xianxin road river crossing channel. The newly signed contract amount was 11.9 billion yuan, an increase of 81% over the same period last year, which increased the overall newly signed contract amount to 31% in the first half of 2021, The newly signed contract amount of most other businesses decreased year-on-year. From January to September 2021, the company completed a total of 32.8 billion yuan of newly signed contracts, a year-on-year increase of 6%. The newly signed contract of the company in 2021q4 was 14 billion yuan, with a significant quarter on quarter growth. The demand for subway construction equipment is growing steadily, and new application fields such as pumped storage bring incremental demand for shield machine / TBM
The downstream works of shield machine are mainly subway works, accounting for 70% – 80%. During the “14th five year plan” period, the operating mileage of China’s urban rail transit will increase by 3000 km, the design service life of shield machine will be 8-10 km, and the subway construction will bring steady growth in equipment demand. With the continuous expansion of TBM application to new fields such as pumped storage, railway highway tunnel (such as Sichuan Tibet Railway), municipal pipe gallery (urban underground parking lot), water conservancy and hydropower, energy coal mine and national defense special industries, there are broad prospects for driving the growth of TBM demand. In recent years, the R & D and application of the company’s deep ploughing pumped storage TBM have filled the gap in the application of domestic TBM in the pumped storage industry and become an important force serving the national carbon peak and carbon neutralization. The company has completed or is in the process of developing and applying TBM equipment for 8 pumped storage power station projects, including Shandong Wendeng pumped storage power station and Henan Luoning pumped storage power station.
Profit forecast and valuation
It is estimated that the company’s revenue from 2021 to 2023 will be RMB 27.6/31.8/37.2 billion respectively, with a year-on-year increase of 14% / 15% / 17%; The net profit attributable to the parent company was RMB 1.97 billion / 2.27 billion / 2.67 billion respectively, with a year-on-year increase of 8% / 16% / 17%, corresponding to PE of 10 / 9 / 7 times, maintaining the “buy” rating.
Risk tips
1) the growth rate of infrastructure investment such as subway slows down; 2) The iteration of energy storage technology and the development of pumped energy storage are lower than expected
