Event: the company released its 2020 annual report on April 8, 2021. In 2020, the company achieved operating income of 2.654 billion yuan, an increase of 1.24% over the same period last year, net profit of 401 million yuan, an increase of 1.02%, and diluted earnings per share of 0.91 yuan, an increase of 1.11% over the same period last year. The company intends to distribute a cash dividend of 2.2 yuan (including tax) to all shareholders for every 10 shares and 4 bonus shares.
Comments: the distribution network energy-saving service business layout is perfect, and the company's profitability is constantly improving. The company's main business is power sales and engineering installation and distribution network energy-saving business, accounting for 47.6% and 52.4% of revenue in 2020, respectively. Among them, the energy-saving business of distribution network adopts the mode of contract energy management (EMC) to provide energy-saving transformation and comprehensive management of energy efficiency for power grid energy saving and loss reduction. After the company reorganized and added the distribution network energy-saving service business in 2016, the energy-saving service revenue from 2017 to 2020 was 793 million yuan, 1.07 billion yuan, 1.252 billion yuan and 1.391 billion yuan respectively, an increase of 34.93%, 17.01% and 11.13% respectively over the same period last year. In 2020, the gross profit margin of electric power sales and engineering installation was 2.97%, down 2.70% from the same period last year; and the gross profit margin of energy-saving services was 36.57%, an increase of 0.44% over the same period last year.
Planning non-public offerings to support the company's long-term sustainable development. The company continues to promote strategic transformation and upgrading, the demand for funds is large, and the asset-liability ratio remains at a high level. From 2017 to 2020, the asset-liability ratio is 72.46%, 69.01%, 61.68% and 67.82%, respectively. In order to acquire the energy-saving assets of the distribution network and related EMC contractual rights and obligations of 9 provincial comprehensive energy companies under the jurisdiction of the State Grid, including Beijing and Hebei, the company plans to issue non-public shares to no more than 35 specific investors, which has been approved by the Securities Regulatory Commission. As of December 31, 2020, the company has completed the delivery of the above assets, the business layout of energy-saving services in the company's distribution network has been further improved, and its market share is expected to increase.
Develop the business of "Internet + traditional power grid" and accelerate the transformation to integrated energy services. In the direction of the application of intelligent new technology, the company has worked out the energy Internet construction plan, completed the substation data center of the multi-station fusion pilot project, completed the construction of electric power Beidou base station, and put "security control" into operation.
Cloud platform, create a typical case of energy Internet, make use of the advantage of "Internet +" to improve the operation efficiency of traditional power grid business, and accelerate the transformation to integrated energy services.
Profit Forecast: from 2021 to 2023, we expect the company's operating income to be 30.06 Universe 3.443 billion Yuan, the net profit to return to the mother is 4.53 Universe 505 Placement 554 million, the EPS is 1.03 Plus 1.15 Placement 1.26, and the corresponding PE is 18.00 Compact 16.15 Placement 14.73 times. Cover for the first time, giving a "buy" rating.
Risk hint: the progress of power reform is not as expected, and the progress of the project is not as expected.
