occurrences
Recently, the company issued the “Notice on Signing a Single Pile Foundation Supply Contract for the German North Sea Offshore Wind Farm Project”. The project is located in the North Sea region of Germany and includes stage A and stage B, with a planned total installed capacity of 1.6 GW. It is currently the largest offshore wind farm planned to be built in Germany. According to the contract agreement, Penglai Daikin, as the exclusive supplier, will supply a total of 105 single piles and ancillary structures for stages A and B, with a total contract value of about 626 million euros.
Report highlights:
The increase in overseas order amounts highlights the company's high-quality product capabilities in the offshore industry. In May 2023, the company has received a contract order of about 547 million euros for the project. This time, the contract amount has been expanded to about 626 million euros, with an incremental amount of 79 million euros. Penglai Daikin will begin construction and delivery of these single-pile products in 2024. This project is the largest overseas offshore engineering order for which the company has signed a supply contract. The company's product capabilities in the offshore field have gradually been recognized by mainstream European offshore wind power owners.
Continue to accept overseas orders, and the overseas offshore strategy is progressing steadily
Overseas offshore wind power markets are booming, compounded by tight supply, and there are broad prospects for domestic manufacturers to go overseas. The company is the first domestic enterprise to export wind power offshore products to Europe in large quantities, and it is also the only large-scale single-pile supplier outside of Europe that can meet European standards. Since 2023, the company has taken the lead in the number of new orders for single-pile products in the European offshore market; in November, the company delivered 48 super-large single-pile projects for the 860 MW Moray West offshore wind farm in the UK. At the same time, the company is participating in a number of offshore projects in Europe, Japan, and the United States with a total demand volume of nearly 3 million tons, involving offshore products such as pipe piles, conduit racks, and floating foundations. It is expected that in 2024-2027, the bid opening results will be obtained one after another, and the global offshore strategy is progressing steadily.
Investment advice and profit forecasting
Daikin Heavy Industries continues to focus on the overseas offshore wind power market. It is expected to benefit from the boom in overseas markets, and its performance has strong growth potential. At the same time, exporting high-quality offshore products will also bring higher profitability to the company. We expect the company's net profit from 2023-2025 to be 6.4/9.6/1.28 billion yuan, respectively, up 41.9%/50.9%/33.2% from the previous year; the current stock price corresponding to PE is 20.5/13.6/10.2 times, respectively, maintaining the “increase in holdings” rating.
Risk warning
The risk of large fluctuations in raw material prices, the risk of increased market competition, the risk of project contract extension, the risk of the company's overseas business not progressing as expected, and the risk of international trade policy.