\u3000\u3000 Jiangsu Rainbow Heavy Industries Co.Ltd(002483) (002483)
Key investment points
Event: 1) the company released the performance forecast for 2021. From January 1, 2021 to December 31, 2021, the company expects the net profit attributable to the parent company to be 340-380 million yuan, with a year-on-year increase of 32.75% - 48.37%; The net profit attributable to the parent company after deduction was 290-330 million yuan, with a year-on-year increase of 38.15-57.21%; 2) Koch, Germany, the holding company of the company, signed a bulk material handling equipment system and on-site installation and commissioning service contract with the National Meteorological Administration of the United Arab Emirates with a total contract price of 911 million euros (about 6.6 billion yuan); 3) The share transfer agreement signed by Guangzhou industrial control and the former controlling shareholder of the company has officially entered into force on January 24, 2022. In the future, it will promote the handling of share transfer registration and other matters as soon as possible.
The 14th five year plan is a key cultivation period for offshore wind power, and the curtain of long-term and high prosperity has opened. At present, the planned installed capacity of offshore wind power will exceed 34.7gw by 2025, which is 4.21 times of the increment of offshore wind power in the 13th five year plan. The substantial increase in installed capacity led to a significant increase in the company's offshore wind power equipment business. The company has the production capacity of various offshore wind power installation platforms, offshore wind power foundation piles, offshore wind power steel structures, offshore engineering cranes and other equipment and products. Among them, the offshore wind pile foundation business has a production capacity of 200000 tons, which continues to promote the rapid growth of the company's performance. In the long run, offshore wind power will continue to develop to the far sea in the future. At present, the company has the production capacity of deep-sea super large piles and jackets, and is expected to benefit the promotion of offshore wind power in the long term in the future.
The "dual core" brand has complementary advantages, and the material handling equipment is brilliant. With the increasing demand of international trade, the demand for material handling equipment also increases. The "Gema / genma" independently developed by the company over the years has been recognized as the "famous trademark of Jiangsu Province". The specific products include: Mobile port crane and port dust-free hopper, pneumatic ship unloader, buried scraper ship unloader, etc. Koch, an old German enterprise acquired by the company, can produce ship unloaders, conveyors, stackers, reclaimers, etc., covering the field of heavy bulk material handling such as coal, iron, bauxite and copper mine, so as to form a dual brand complementary advantages with "Gema" and comprehensively optimize the industrial structure. In particular, Koch company in Germany has repeatedly obtained major sales orders since 2021. According to the company's announcement, it signed a bulk material handling equipment system and on-site installation and commissioning service contract worth 242 million euros (about 1.9 billion yuan) with the UAE Meteorological Bureau in July 2021. In January 2022, the company signed another bulk material handling equipment system and on-site installation and commissioning service contract with the National Meteorological Administration of the United Arab Emirates with a total contract price of 911 million euros (about 6.6 billion yuan). The average annual contract amount accounts for about 36.29% of the company's audited operating revenue in 2020, which will have a certain impact on the company's operating performance in 2022 and in the future.
The "two legs" development of environmental protection business has taken shape, and the "double high" of production capacity gross profit has helped greatly improve the performance. In March 2021, the general office of the State Council issued the notice on printing and distributing the implementation plan for strengthening the reform of hazardous waste supervision, utilization and disposal capacity, which proposed that by the end of 2022, the harmless disposal rate of medical waste in built-up areas of cities above the county level should reach more than 99%; By the end of 2025, establish and improve the hazardous waste supervision system with strict prevention at the source, strict management in the process and severe punishment in the consequences. All provinces and cities have issued local hazardous waste treatment policies accordingly. The company's environmental protection business mainly covers hazardous waste, medical waste disposal and sludge disposal, both of which have begun to take shape. According to the company's announcement, the hazardous waste and medical waste disposal business of the subsidiary CNPC environmental protection has a capacity of 330000 tons / year, and the scale is in the forefront of listed companies. Lvwei environmental protection, a subsidiary, has cooperated with the technical team of Fudan University to establish a company to vigorously expand key and difficult fields such as river sludge, pipeline sludge and deep pit sludge. At present, it has a production capacity of 1 million tons / year, and 820000 tons / year production capacity projects are under construction. In the future, with the continuous growth of market demand for hazardous waste and sludge disposal brought by economic development, the high gross profit margin and large-scale production capacity release of the industry will drive the rapid growth of the company's environmental protection performance.
Guangzhou industrial control has been gradually implemented, and all-round empowerment has entered a new stage of development. The controlling shareholder of Guangzhou industrial control group is Guangzhou Municipal People's government. The group controls many large-scale advanced manufacturing industries and has rich resources. According to the announcement, Guangzhou industrial control will ensure the company's personnel independence, asset independence, financial independence, institutional independence and business independence, and the ownership will not have an impact on the company's operation and management structure. Through its own resource advantages, industrial control will actively empower the company in all aspects from the aspects of capital operation, market development and financial support, vigorously support the company to build a high-end equipment industry production base in the south, and expand the market orders of offshore wind power equipment, material handling equipment and environmental protection business in the South China Sea and Guangdong, Hong Kong and Macao Bay area. The company is expected to take the lead in seizing market share in the south, especially the South China Sea is extremely rich in offshore wind power resources and is currently in the early stage of development. At the same time, it is expected to cover emerging offshore wind power development countries such as the Philippines, Malaysia and Thailand through market effect radiation in the future, so as to complete the overseas expansion of business. At present, the company is in a critical stage of development. With the full support of industrial control, the company is expected to break through the growth bottleneck and enter a new stage of growth.
Raised to "buy" rating: the company's "high-end equipment + environmental protection" business structure layout, and its industries have good development prospects and market activity. Driven by national policies, offshore wind power will have an ultra cyclical and high prosperity development trend, and the material handling business has formed a dual brand collaboration, covering light and heavy bulk material transportation equipment in an all-round way, In terms of environmental protection, the company has a large processing capacity and is expected to obtain a larger market share with the promotion of policies. The state-owned shareholders are about to take over, and all-round empowerment will lead the company into the high-speed growth channel, with good development prospects in the future. It is estimated that the operating revenue of the company from 2021 to 2023 will be 4.403 billion yuan, 5.560 billion yuan and 6.838 billion yuan respectively (the previous forecast was 4.234 billion yuan, 5.374 billion yuan and 6.622 billion yuan respectively), with a year-on-year increase of 22%, 26% and 23% respectively. From 2021 to 2023, the net profit attributable to the parent company was RMB 372 million, RMB 521 million and RMB 678 million respectively (the previous forecast was RMB 334 million, RMB 444 million and RMB 595 million respectively), with a year-on-year increase of 45%, 40% and 30% respectively. It is estimated that the EPS from 2021 to 2023 will be 0.39, 0.55 and 0.72 yuan respectively, and the corresponding PE will be 19.3, 13.8 and 10.6 times respectively. The profit in 2021 exceeded expectations and was raised to the "buy" rating.
Risk warning event: the policy promotion is not as expected; Intensified market competition; The market demand of downstream industries grows slowly.
