Net profit meets expectations, energy-saving business opens a new chapter
The company released its annual report on April 09, 2021, with annual revenue of 2.654 billion yuan (year-on-year + 1.24%) and net profit of 401 million yuan (+ 1.02%). The net profit was in line with our expectations (417 million yuan). The company is the national network energy-saving listing platform, energy-saving business opened a new chapter, we estimate that the 21-23 EPS of 1.23max 1.35max 1.48X, the target price of 22.76yuan, maintain the "overweight" rating.
Energy-saving business advances steadily, gross profit margin increases slightly
Energy-saving business revenue 1.391 billion yuan (36.57% year-on-year), gross profit margin 36.57% (year-on-year + 0.44pct), distribution network energy-saving business steadily, gross profit margin increased slightly. We expect that the productive technological renovation project and the second phase of Xinjiang project are expected to release their performance in 21 years, with an average annual contract value of about 87 million yuan. According to the national network "carbon peak, carbon neutralization" action plan, during the 14th five-year Plan period, the State Grid will focus on promoting energy conservation and efficiency of the whole society, improving the level of electrification of terminal consumption, accelerating the implementation of energy conservation and emission reduction of the company, and reducing its own carbon emission level. we believe that the demand for energy-saving transformation of the distribution network may be enhanced during the 14th five-year Plan.
The asset injection completed delivery at the end of the 20th, fully benefiting from the energy-saving transformation of the national distribution network. According to the company's disclosure, in 2020, the company acquired the energy-saving assets of the distribution network of Beijing, Hebei and other nine provinces under the jurisdiction of the State Grid Co., Ltd., and completed the formal delivery of the assets on December 31, 20. According to the "Private Stock offering Plan" issued in December 20, each provincial comprehensive energy company signed a performance commitment compensation agreement with Fuling Electric Power, promising that the net profit of the existing asset package will not be less than 1.39,1.58 and 144 million yuan in 20-22 years. Undertake the corresponding compensation obligations, is expected to further increase the stability of the performance of the assets to be purchased. According to the 16-year agreement on the acquisition of energy-saving assets, the State Grid Company has promised to solve the problem of inter-industry competition within the national network within 5 years and will fully benefit from the energy-saving transformation of the distribution network in the national network region.
The 20-year electricity distribution business is obviously under pressure. The energy-saving business drives the annual gross profit margin year-on-year + 0.37pct distribution business revenue of 1.264 billion yuan (- 7.79%) and gross profit margin of 2.97% (year-on-year-2.7pct), mainly affected by the settlement of general industrial and commercial electricity prices in the past 20 years. Fuling plans to reduce electricity prices by less than 2.85% in 21 years, and we believe that the company's average electricity price is expected to rise in 21 years. Support the growth of electricity distribution business. The 20-year overall gross profit margin is from + 0.37pct to 20.58% compared with the same period last year, mainly due to the increase in gross profit margin of energy-saving assets in the distribution network. The expense rate during the period is from-0.38pct to 5.48% year on year, of which the management expense rate is 3.
47% (year-on-year-0.32pct), mainly benefiting from the decline in employee salaries and office and rental expenses.
National network energy-saving listing platform, energy-saving business opens a new chapter
The company is a national network energy-saving listing platform, considering asset injection, we raised the company's 21-22 EPS to 1.23 EPS 1.35 yuan (the previous value is 1.14 yuan 1.30 yuan), and introduced a 23-year EPS forecast of 1.48 yuan. Comparable company 2021 Wind consistency expected average PE of 18.51x, we give the company 18.5x PE in 2021, the target price of 22.76yuan (the previous value of 18.24yuan), given the "overweight" rating.
Risk hint: power grid investment is not as expected; industry competition intensifies.