Plan to acquire Longji BIPV business in cash to eliminate inter-industry competition. The company announced that it intends to acquire 100% equity in Longji Green Energy Photovoltaic Project with about 68.49 million yuan in cash, which was previously wholly owned by Longji and is mainly engaged in product research and development in the field of BIPV, project construction and other business. After the completion of the acquisition, Lonji and the company's new BIPV projects are undertaken, implemented and delivered by the company, and each other is the only partner in this field. We believe that this acquisition can effectively solve the problem of inter-industry competition and further enhance the company's competitiveness in the field of BIPV. We have calculated that the market space of traditional metal roofing is about 26.4 billion yuan and the company has a market share of 12% in "Saint share depth: metal enclosure industry leader, BIPV helps performance take off". The company uses the technology accumulation and customer resources in the metal enclosure market, Longji makes use of the technical advantages in the photovoltaic field, the two resources complement each other, and will seize the dominant position in the BIPV market in the future.
"Longding" products contain a variety of special materials, which can cover the whole industrial field. The company's "Longding" series of products have the characteristics of high wind resistance, high waterproof, high fire prevention and high reliability, which are composed of special components and colored steel tiles produced by Longji. Among them, the special components enable the roof to be trampled directly after the completion of the project, while the special color steel tiles have a service life of up to 25 years and can cover the full life cycle of BIPV 25 years, while the service life of conventional color steel tiles is only 8-10 years, which needs to be replaced after 15 years at most. Although the cost of topping is higher than that of the same industry, its economic benefit is better, especially in industrial and commercial projects.
At the same time, the product has a wide range of applications and can cover the whole industrial field.
The advantages of technology and customer resources are obvious, and large industrial orders begin to increase. As a leader in the field of metal roofing, the company has accumulated a lot of construction technology and experience, basically including the high-end metal enclosure and installation business of domestic large-scale public buildings and advanced factories, and has the installation advantage of connecting BIPV products to the roof. At the same time, the company is rich in customer resources, brand advantage has established the company's market competitiveness. On March 7, 2022, the company won the bid for Shandong heavy Industry BIPV roof project, with a winning amount of about 800 million yuan, accounting for 25.37% of the company's revenue in 2020, which is currently the largest single BIPV construction order. The construction period is 150 days and there is a high probability that it will land this year. We expect that a number of framework agreements signed by the company will gradually become BIPV orders, which will significantly increase the performance. It is expected that 2022 will be a big year for the landing of BIPV orders, with high growth in the industry.
Investment suggestion: this acquisition effectively solves the competition among the same industry and further establishes the company's advantage in the field of BIPV.
With the expansion of BIPV orders in 2022, the company's profitability is expected to increase significantly. Maintain the company's EPS of 0.06,0.61,1.06 yuan per share from 2021 to 2023, and maintain the "prudent recommendation-A" rating.
Risk tips: BIPV business expansion is not as expected, accounts receivable recovery risk, upstream raw material prices fluctuate sharply, market competition intensifies, short-term performance related risks.
