China energy construction absorbed share exchange and merged its core subsidiary Gezhouba to realize the overall listing of a shares, which will realize the comprehensive integration of resources and capital and greatly improve the company’s competitiveness and profitability.
As a central enterprise giant in the energy and power industry, under the national dual carbon strategy, the company reflects its leading advantages and mission.
Since 2012, the company has promoted industrial transformation and upgrading, focused on the main metallurgical industry, actively expanded to non metallurgical and other fields, and formed the “four beams and eight pillars” business system of project contracting, real estate development, equipment manufacturing and resource development.
The company’s real estate development business is stable and gradually transformed to urban operators.
Maintain the buy rating, with a target price of 5.33 yuan.
The order structure of the company’s engineering contracting business is diversified.
MCC (601618): one of the construction + series reports: Global metallurgical leader, diversified business development and new opportunities 01 MCC (601618): Global metallurgical leader, diversified business development and new opportunities, global metallurgical leader, The rapid growth of newly signed orders will drive the performance into the release period.
We expect the company’s EPS to be RMB 0.49/0.60/0.72 from 2021 to 2023.
The company’s main business power survey and engineering performance is expected to benefit from the rapid development of pumped storage and new energy power construction in the future.
In 2018-2020, the amount of newly signed orders will reach 19.2%, which will drive the performance into the release period.
In terms of resource development, the company currently owns four high-quality mineral resources mining rights, such as Ruimu nickel cobalt mine in Papua New Guinea.
Under the background of “double carbon” policy, the industry-leading and excellent technical capacity will support the company to boost the green, intelligent and low-carbon transformation of the iron and steel industry, such as “hydrogen metallurgy” technology, and the business order is expected to continue to grow.
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Whether in pumped storage or investment and construction of new energy projects, the company has accumulated rich engineering performance and has a high market share.
It has a complete industrial chain integrating planning consulting, evaluation and review, survey and design, engineering construction and management, operation and maintenance and investment operation, technical services, equipment manufacturing and building materials.
Recently, under the background of the revision of land auction rules in key cities, it is helpful to improve the land acquisition profit margin of real estate development business.
The company is the world’s largest metallurgical construction contractor and metallurgical enterprise operation service provider, occupying 90% of the domestic metallurgical market share and 60% of the global metallurgical market share, with a significant industry position.
02 China energy construction (601686): the merger subsidiary re registered a shares, the whole industry chain power engineering giant set sail, the global power engineering leader, with the whole industry chain service ability, and the merger subsidiary Gezhouba re registered a shares.
In 2020, the operating revenue will reach 400.1 billion yuan, with a year-on-year increase of 18.2%; The net profit attributable to the parent company was 7.86 billion yuan, a year-on-year increase of 19.1%.
The company’s main business covers five sectors: survey, design and consulting, engineering construction, industrial manufacturing, clean energy and environmental protection water affairs, investment and others.
We sincerely apologize for the inconvenience caused to you, and thank you for your understanding and cooperation! Zhu Jin, chief Real Estate & Architecture Team of CSC securities, launched a series of research reports on architecture + Construction: PowerChina (601669): Construction + series report 5: embrace new energy, 100 billion power construction and leap forward to Guangdong hydropower (002060): Construction + series report 4: Guangdong water conservancy and hydropower dragon head, high growth of clean energy business opens up growth space architecture + series report 3: start from the new, Industrial resonance between construction and new energy: China energy construction (601868): the second of the construction + series reports: absorbing and merging subsidiaries to re register a shares, and the power engineering giant of the whole industry chain sets sail.
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In 2020, the company achieved an operating revenue of 270.3 billion yuan, a year-on-year increase of 9.3%; The net profit attributable to the parent company was 4.67 billion yuan, a year-on-year decrease of 8.6%.
There will be broader application scenarios in the carbon neutral development of the construction industry in the future.
China energy construction is the largest comprehensive solution provider in the power industry in China and even in the world.
It is expected that the nickel price will continue to operate at a high level, superimposing the possibility of in-depth exploration and production expansion, and will continue to increase the profit of resource development business in the future.
If the profit after the merger of Gezhouba is considered, the net profit level will reach 6.63 billion yuan.
Actively expand new energy business and fully benefit from the national dual carbon strategy.
In recent years, the demand for assembled buildings under the requirements of low-carbon development has increased, and the total design capacity of the company’s steel structure has reached 1.65 million tons.
According to the segment valuation method, we estimate that the target market value of the company is 110.4 billion yuan, and the corresponding target price is 5.33 yuan, maintaining the buy rating.
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The global new energy vehicle industry continues to benefit from favorable policies, and the downstream demand for high nickel ternary power batteries continues to expand.
In addition, the company will fully enter the new energy operation industry and strive to hold more than 10 times of the current new energy installed capacity by 2025.
The “buy” rating is given for the first coverage, and the target price is 2.40 yuan / share..
With the support of policies such as carbon neutralization, improvement of local auction rules and prefabricated buildings, there are new opportunities for diversified business development.
In 2020, the number of newly signed orders will exceed trillion, ranking fifth among the eight central construction enterprises.
Risk tip: insufficient demand for transformation and upgrading of iron and steel industry; The promotion of carbon neutralization policy is less than expected; The overseas epidemic continued to develop, and the promotion of resource development business was less than expected.
