Incidents:
The company published its 2021 annual report and 2022 quarterly report. In 2021, it achieved operating income of 83.720 billion yuan, an increase of 15.00% over the previous year; net profit of Guimu was 1,533 billion yuan, an increase of 12.70% over the previous year; after deducting net profit of non-Gimo's net profit of 1,340 million yuan, an increase of 6.35% over the previous year. The first quarter of 2022 achieved operating income of 26.276 billion yuan, an increase of 23.74% over the previous year; net profit of 423 million yuan, an increase of 25.84% over the previous year; after deducting net profit of 414 million yuan, an increase of 26.97% over the previous year.
Commentary:
The business progressed steadily, and revenue continued to grow. The company's nuclear power engineering/industrial and civil engineering/other projects achieved revenue of 11.964 billion yuan/66.967 billion yuan/3.781 billion yuan respectively in 2021, up +15.03%/+15.21%/-0.79% year-on-year respectively, and achieved relatively rapid overall growth. By region, domestic and overseas main businesses achieved revenue of 80,017 billion yuan/2,696 billion yuan respectively, up 14.88%/0.45% year-on-year respectively, and both achieved growth. The revenue growth trend continued in the first quarter of 2022.
The market is developing smoothly and the order reserve is sufficient. By increasing market development efforts, the company signed 2,883 new orders in 2021, amounting to 124.167 billion yuan, an increase of 12.94% over the previous year. Among them, nuclear power engineering/industrial and civil engineering were 23.8 billion yuan/10.3 billion yuan respectively, up 5.5%/14.9% year-on-year respectively.
At the end of 2021, orders in hand were 232,479 billion yuan, an increase of 12.28% over the previous year. New orders of 29.065 billion yuan were signed in the first quarter of 2022, an increase of 19.4% over the previous year, and the growth trend continued.
Investment in R&D has increased, and scientific and technological attributes have been strengthened. R&D expenses in 2021 were 1,376 million yuan, an increase of 43.88% over the previous year, accounting for 1.64% of revenue, an increase of 0.33 pct over the previous year. As of the end of 2021, there were 8,403 R&D personnel, accounting for 20.58% of the company's total number. Compared with 5027 R&D personnel at the end of 2020, accounting for 10.80% of the total number, the proportion of R&D personnel increased dramatically, and the technological attributes were significantly enhanced.
Nuclear power construction has accelerated under the dual carbon strategy, and the company has benefited significantly. Since 2019, China's investment in nuclear power projects has shown an increasing trend. In 2021, the national investment amount was 53.8 billion yuan, an increase of 42.33% over the previous year.
In the first half of 2021, the country approved 5 nuclear power units. The pace of approval and commencement of construction accelerated markedly. The company dominated the domestic nuclear power construction market and benefited significantly.
The first coverage gave the company a “buy” rating, with a target price of 10.20 yuan. EPS is expected to be 0.68/0.81/0.96 yuan from 2022 to 2024, and the corresponding PE is 11.58/9.71/8.23 times.
Risk warning: company performance is not as good as expected, project progress risk, ESG risk