Main points of investment
Guangdong Hydropower released its annual report for 2021: the company's operating income in 2021 was 14.361 billion yuan, an increase of 14.13% over the same period last year; its net profit was 328 million yuan, an increase of 24.45% over the same period last year; of which Q4 realized an operating income of 4.459 billion yuan, an increase of 12.11% over the same period last year. The net profit reached 96 million yuan, an increase of 8.21% over the same period last year.
In 2021, the company achieved operating income of 14.361 billion yuan, an increase of 14.13% over the same period last year. The rapid growth of revenue from water conservancy and hydropower projects is the main reason for the company's revenue growth. The rapid growth of water conservancy and hydropower project business income is the main reason for the company's revenue growth, while the company's wind power and solar power business increased by 20.64% and 19.17% respectively, maintaining rapid growth.
In 2021, the company achieved a comprehensive gross profit margin of 11.25%, an increase of 0.09pct over the same period last year, mainly due to higher gross profit margins in the wind and solar power business. The decline in business gross profit margin of water conservancy and hydropower projects is mainly due to the rapid progress of construction of major projects such as water resources projects in the Pearl River Delta, and the increase in construction costs, but the revenue recognition lags behind. The increase in gross profit margin of wind power and solar power generation business is mainly due to the company's implementation of clean energy specialization, efficient operation and maintenance management, and unattended operation and management mode in some power plants.
In 2021, the company's assets + credit impairment losses totaled 172 million yuan, accounting for 1.20% of income, an increase in 0.51pct over the same period last year, mainly due to the increase in the impairment loss of contract assets in asset impairment under the influence of the new accounting standards.
Profit forecast and rating: as the reorganization of assets between the company and Guangdong Construction Engineering has not yet been completed, the profit forecast will not consider the injection of assets by Guangdong Construction Engineering for the time being. We have raised our profit forecast for the company, and it is expected that the company's EPS forecast for 2022-2024 will be 0.33,0.40,0.49 yuan respectively, and the closing price on March 30 will be 26.5x, 21.9x and 18.0x respectively, maintaining a "prudent overweight" rating.
Risk hints: macroeconomic downside risks, lower-than-expected risks in the landing of existing orders, lower-than-expected returns on green energy projects, lower-than-expected risks in the progress of asset integration, and lower-than-expected risks in the recovery of accounts receivable
