Events:
On July 29, the company's fixed increase plan was examined and approved by the Shanghai Stock Exchange. The approved plan is basically the same as the plan released on April 4. It is proposed to issue no more than 272.9 million A shares to no more than 35 specific investors, including the controlling shareholder Dongfang Electric Group, and raise no more than 5 billion yuan (500 million yuan subscribed by the group). Of this, about 2.527 billion yuan is used to acquire shares in Dongfang Motor, Dongfang Steam Turbine, Dongfang Boiler and Dongfang heavy Machinery held by the Group. About 1.195 billion yuan will be used for construction projects, and the remaining 1.278 billion yuan will be used to supplement working capital.
Main points of investment:
After the completion of the fixed increase, the company basically controls the core assets of the group. Dongfang Motor, Dongfang Steam Turbine and Dongfang Boiler are the core subsidiaries of the company and the Group, which are responsible for the manufacturing of core equipment such as coal power, nuclear power, gas power, hydropower and wind power, while Dongfang heavy Machinery is mainly responsible for the manufacturing of nuclear power island equipment. In 2022, the operating income of the four subsidiaries was 9.51 billion yuan, 10.52 billion yuan, 12.15 billion yuan and 1.558 billion yuan respectively, accounting for 62.3% of Dongfang Electric's 2022 operating income, and the net profit was 659 million, 818 million, 749 million and 0.19 million respectively, totaling 2.245 billion yuan. accounted for 74.58% of Dongfang Electric's net profit in 2022. The increase will buy 8.14%, 8.70%, 4.55% and 5.63% of the shares in four companies respectively, with an average PE of 15.3 times based on 2022 net profit (Dongfang Electric's current market capitalization corresponds to 19.4 times of 2022 PE) and an average PB of 1.44 times (Dongfang Electric's current PB (lf) is 1.67 times).
Raise funds to invest in pumping, gas turbine and other fields, optimistic about the future prospects of related industries. The company also announced four construction projects, including pumped storage development and upgrading project, gas turbine rotor processing and manufacturing project, Dongqi digital workshop construction project and Dongpan digital construction project, with a total investment of about 2.05 billion yuan, of which 1.195 billion yuan was used to raise funds. The development of new energy construction promotes the construction demand of flexible power supply. Pumped storage and gas turbine are efficient flexible power sources. With the boost of pumped-up two-part electricity price, a total of 68.9GW was approved in 2022, which is five times higher than that of 13.8GW in 2021. The company's pumped-up order has reached 5.394 billion yuan by the end of 2022. Gas turbine orders on hand reached 7.085 billion yuan at the end of 2022 (an increase of 5.308 billion yuan compared with 21 years), which is expected to become one of the company's fastest growing sectors in recent years.
The development space of traditional power supply is higher than expected, which is bound to increase the future return net profit. Under the dual-carbon strategy, the long-term development logic of traditional power supply has undergone a fundamental change, new energy can not solve the problem of peak power supply, and load growth has become the underlying driving force of traditional power demand. 21-23 years China's highest load growth 112-95-80-100GW (China Power Union Forecast), this growth scale will be maintained for a long time. Energy storage and demand response are limited to solve the peak problem, and the high-intensity construction of traditional power supply is still needed. The reduction of thermal power utilization hours will not change the traditional power growth logic. Due to the problem of peak gap, it is expected that a small number of new units will be needed to maintain peak capacity during the 15th five-year Plan, and the replacement demand for old units will be superimposed. The demand for thermal power equipment will be 40GW/ in the 15th five-year Plan. The growth rate of hydropower, nuclear power and gas power is obvious, especially the hydropower plate is expected to grow exponentially, and hydropower companies and Harbin power companies have obvious advantages and benefit more. The electricity reform continues to accelerate, which is good for reliable and flexible power supply, the large-scale progress of photothermal and pressure storage is expected to be accelerated, and the flexibility transformation is expected to be started on a large scale. The principle of traditional power technology is similar, and most of the manufacturing is produced by the four subsidiaries acquired this time, and the follow-up revenue and profits are expected to grow at a high speed. In this context, the acquisition of core subsidiary assets will greatly increase the long-term return net profit of the company.
Profit forecast and rating: the future traditional power demand is essentially driven by sustained load growth and power structural adjustment (clean power instead of non-clean power), and the fundamentals of the industry are obviously better than those before double carbon. Industry growth, competition pattern, profit stability can be compared to the standard grid quality companies, Guodian Nanrui, Huaming equipment, Siyuan Electric 23-25 average PE24, 19, 16 times. As the increase has not been completed, the company's financial statements and profit forecast will not be adjusted for the time being. It is estimated that the return net profit of the company from 2023 to 2025 is 38.6,53.1 and 6.14 billion yuan respectively, and the current share price corresponding to PE is 15, 11 and 10 times respectively, which is significantly lower than that of comparable companies, so it continues to maintain the "buy" rating.
Risk hint: thermal power investment is not as expected and pumped storage approval is not as expected.