Introduction to this report:
The profit forecast and target price were maintained, and the increase in holdings rating was maintained; Hengtong High Pressure introduced war investment and withdrew through equity rollover or redemption; in 2024, various projects were released, and industry prosperity rebounded.
Key points of investment:
Maintain profit forecasts, target prices, and holdings growth ratings. The company announced that its subsidiary Hengtong High Pressure will introduce strategic investment, totaling about 1.03 billion yuan. We will maintain our 2023-2025 net profit of 21.10/25.1/3 billion yuan, corresponding to EPS of 0.86/1.02/1.23 yuan, maintain a target price of 17.2 yuan, and maintain an increase in holdings rating.
Hengtong High Pressure introduced war investment and clearly withdrew through share rollover or redemption. Hengtong High Pressure and its main subsidiaries (Hengtong Haineng, Hengtong Offshore, Hengtong Lande, Jieyang Hengtong) are important development units in the company's marine energy sector. The current round of financing introduced Jianxin Investment, Bank of China Assets, Hainan Zhongying, and Changshu Economic Development Fund. The estimated investment is 1.03 billion yuan. After completion, the company's shareholding ratio is 89.61%, and the total shareholding ratio of other shareholders is 10.39%. We anticipate that the financing will be used to expand factories in Jieyang, Changshu, etc. According to the agreement, investors in the current round will withdraw through share reversal (that is, the shares of Hengtong High Voltage are converted to shares of Hengtong Optoelectronics) or redeem at a simple interest rate of 8% per year at the latest before June 30, 2027. This is a common way for BattleInvestment to withdraw its subsidiary (Hengtong High Voltage) without considering listing.
2024 Local projects were released, and industry sentiment picked up. Recently, Yangjiang, Guangdong will focus on putting into operation Yuedian Qingzhou II in 2024, continuing 5 offshore wind power projects and starting 6 new projects, totaling 8.6 GW. Jiangmen, Guangdong also listed Kawashima 1 and Kawashima 2 as key construction projects; Zhejiang Province will push for Shengsi 1 #、3 #、4 #、7 #海上风电场建设，以及象山3 to launch a competition.
In March, projects from various parts of the industry were released one after another, and the boom rebounded markedly.
Catalyst: This round of strategic investment progressed smoothly, and the boom in the sea breeze industry picked up;
Risk warning: The profitability of submarine cables and optical cables is declining