2021 performance is in line with our expectations
The company announced its 2021 results and held a performance presentation: the operating income was 47.819 billion yuan, an increase of 28.3% over the same period last year; the net profit from its mother was 2.289 billion yuan, an increase of 22.9% over the same period last year, in line with our expectations.
Wind power and engineering business has achieved rapid growth, while the traditional business is basically sound. In 21 years, the company's revenue from wind power / engineering and trade / emerging growth industries increased by 69.8% compared with the same period last year, 60.3% and 29.8% respectively, and the revenue from renewable energy equipment (water, wind and light) exceeded that of clean and efficient energy equipment (fire, nuclear and fuel) for the first time, accounting for 31.7%. At the same time, the company's demand for traditional power generation equipment remains strong, and the output and sales of steam turbine generator sets in 2021 increased by 67% and 102% respectively compared with the same period last year. The contribution income of thermal power and nuclear power increased by 20.4% and 23.5% respectively, while the revenue of hydropower remained basically flat, while that of gas turbines decreased by 14.1% compared with the same period last year.
Rising costs and changes in income structure have dragged down gross profit margins and good cost control during the period. Affected by the rapid increase in the proportion of wind power business, raw material price fluctuations, freight and other factors, we estimate that the company's gross profit margin in 2021 decreased by 3.7ppt to 18.9% year-on-year, including thermal power business gross profit margin decreased 5.31ppt. The company's sales / management / R & D expense rates are respectively-0.2/-1.2/-1.0ppt, and the net interest rate is relatively stable.
Abundant orders on hand support the continued growth of the company's performance. The company added 56.392 billion yuan of effective orders in 2021, an increase of 14.15% over the same period last year. Among them, clean energy efficient equipment / renewable energy equipment plate increased orders of 127.5 million RMB 14.524 billion respectively. By the end of 2021, the company has an order of 81.6 billion yuan.
Trend of development
Power investment continues to grow, the company is expected to fully benefit. According to the national planning and the data of the China Federation of Power and Power, we initially estimate that the new capacity of thermal power / conventional hydropower / nuclear power will be about 50-55/85GW in 2022, respectively. The company already has a leading position in the field of conventional power equipment manufacturing, with a market share of 30% and 40%. In addition, the company recently launched its first 13MW offshore wind turbine, which has the largest unit capacity in Asia and is expected to benefit from the development of offshore wind power resources in the future.
Thermal power transformation and pumped storage power contribute to the new momentum of the company's growth. Thermal power flexibility and pumped storage are important regulation resources for new power systems in the future. The state requires the flexible retrofit of thermal power plants and pumped storage to increase the regulation capacity of 40/30GW respectively during the 14th five-year Plan period. According to the calculation of the company's existing production capacity and market share, we expect to bring an annual revenue increase of 40-5 billion yuan for the company.
Profit forecast and valuation
We keep the company's profit forecast for 2022 unchanged and introduce a forecast of 3.334 billion yuan for 2023. A shares are currently traded at 11.8 times earnings at 14.5 pesks in 2022, and H shares are traded at 7.3 times earnings in 2022 scarps in 23. Maintain the "outperform industry" rating. Taking into account the pressure on the company's gross profit margin, we reduced the price of the company's Amax H shares by 26.7% to 17.22 yuan / HK $10.02, corresponding to the 23-year price-to-earnings ratio of 19.8 and 8.1 times for 2022max, with upside space of 36.6% and 34.7%.
Risk.
Price competition is stronger than expected and costs fall slowly.