Shanghai Harbor is a leading enterprise in the soft foundation treatment industry, which has established brand advantages and technical benchmarks in Southeast Asia, the Middle East and other places, and its management quality is obviously higher than that of its domestic counterparts. The company's orders have been opened and are expected to benefit from increased investment in infrastructure in the long run. Cover for the first time and give an overweight rating.
Support the main points of rating
A leading company in soft foundation treatment, dominated by overseas markets. Shanghai Harbor has been ploughing the soft foundation treatment industry for more than 20 years, and the project has rich construction experience and technical reserves. The soft foundation treatment business accounts for more than 80% of the company's revenue, and the project covers many regions such as China, Southeast Asia, the Middle East, Latin America and so on.
The concentration of the soft foundation treatment industry is low, the infrastructure investment is accelerated after the epidemic, and there is a broad space for development. The cost of the soft foundation treatment project accounts for only about 1%, the implementation period is shorter, and the payback situation is better. According to our estimates, the global foundation treatment market is about $41 billion in 2022 and is expected to grow to $72 billion in 2030. There are many participants in the soft foundation treatment industry, but the concentration is low. The total CR3 is less than 15%, and the market share of Shanghai Harbor is only 0.3%. With the increase of infrastructure investment by many governments after the epidemic, there is a broad space for the development of soft foundation treatment enterprises in the future.
Shanghai Harbor: taking the lead in going out to sea creates a competitive advantage. 1) overseas layout in advance, benefiting from the good payment conditions of overseas customers: the company is the only enterprise in the domestic soft foundation treatment industry dominated by overseas business, and the main customers are overseas state-owned enterprises and listed companies. the terms of payment are obviously better than domestic customers. 2) the project has rich experience and strong technical level: in 2001, the company initiated the "fast 'high vacuum compaction method' soft foundation treatment method", which has the characteristics of short construction period, material saving, energy saving and environmental protection, and good construction effect. The company edited and participated in the national norms, industry norms and association standards, and jointly compiled the Indonesian national code for foundation treatment with the Indonesian government, becoming the first enterprise in China's geotechnical engineering industry to export standards overseas. 3) the pressure of raw material purchasing and labor cost is low, and the profit level is further improved: the company's main raw materials are petrochemical products with mature manufacturing process, and the company can flexibly select suppliers according to the project situation, and there is no over-reliance on some suppliers. The proportion of foreign employees in the company is high, and the economic level and salary level of the employees in the main areas of the company are generally lower than those in China, which can effectively reduce the problem of rising labor costs in the construction industry and further improve the profit level of the company.
Valuation
The company is a leading company in the soft foundation treatment industry and is expected to benefit from increased infrastructure investment in various countries for a long time. We estimate that the income of the company from 2023 to 2025 is 10.96,13.39 and 1.603 billion yuan respectively, the net profit returned to the mother is 1.93,2.41 and 294 million yuan respectively, and the EPS is 0.78,0.98,1.20 yuan respectively.
Cover for the first time and give an overweight rating.
Main risks faced by rating
The progress of major projects is not as expected, the risk of recovery of accounts receivable and the risk of large exchange rate fluctuations.