台海核电(002366)2018年报暨2019年一季报点评:核电正式重启 基本面拐点确立

Taihai Nuclear Power (002366) 2018 Report and 2019 Quarterly Report Review: Nuclear Power Officially Restarted, Fundamental Inflection Point Established

國信證券 ·  04/29/2019  · Researches

19Q1 performance fell 44.18% year on year

The company released its 2018 annual report and 2019 quarterly report. In 2018, it achieved revenue of 1,380 million yuan, a year-on-year decrease of 44.14%, and Guimu's net profit of 336 million yuan, a year-on-year decrease of 66.90%; 2019Q1 achieved revenue of 352 million yuan, a year-on-year decrease of -24.34%, and Guimu's net profit of 103 million yuan, a year-on-year decrease of 44.18%, mainly due to:

1) Tenders for new domestic nuclear power projects have been delayed and construction has slowed, and the company's revenue confirmation progress for new orders and on-hand orders fell short of expectations; 2) Revenue confirmation progress for offshore piles fell short of expectations. In 2018, the company's gross margins and net interest rates were 61.28%/24.63%, a year-on-year decrease of 6.65%/17.28%, mainly due to a sharp increase in sales/management expenses due to a decline in revenue. The company's net operating cash flow was 330 million yuan, a sharp improvement over the previous year.

Based on the advantages of materials and equipment manufacturing, related diversified layouts are becoming more and more effective

The company continues to expand application fields based on the two core advantages of high-end material R&D and production capacity and high-end equipment manufacturing capacity. On the one hand, it relies on advanced material manufacturing technology to carry out platform-based expansion, gradually expanding from nuclear power main pump pump casings and nuclear grade pump valve parts, nuclear capacitor main equipment forgings and forgings for small offshore main equipment, etc., and further expanded to high-end civil materials in the hydropower/thermal power/oil and gas/shipbuilding industries. On the other hand, it combines high-end equipment manufacturing capabilities to deepen the nuclear power equipment industry chain, achieving the transition from nuclear power to onshore power supervisors Other main equipment of nuclear power plants, floating at sea From main equipment such as containers for nuclear power plants to breakthroughs in nuclear waste reprocessing system equipment, we estimate that the company currently has orders exceeding 5 billion yuan. The company's diversified layout is becoming increasingly effective. This will reduce the company's dependence on a single onshore nuclear power plant business, reduce the impact of policy changes on the company's performance, and facilitate the company's long-term healthy development.

Nuclear power was officially restarted in 2019, and the company's onshore nuclear power orders are expected to increase

At the beginning of '19, four “Hualong 1” nuclear power units will be approved, marking the official restart of nuclear power and that batch construction is expected to begin in the next three years. According to our estimates, the value of a single unit of the company's product is close to 300 million yuan. Based on an estimated market share of 50%, the company's onshore nuclear power plant orders are expected to gradually increase, corresponding to an average annual order exceeding 1 billion yuan.

Profit forecasts and investment suggestions:

The company is a leader in private nuclear power equipment. Nuclear power was restarted in early '19, and an inflection point in the industry was established; with the introduction of the CNNC Hong Kong Industrial Fund as a strategic shareholder, an inflection point in the company's fundamentals was established. Net profit for 2019-21 is expected to be 576/801/947 million yuan. The current stock price corresponds to PE 19/14/12 times. Maintain an “increase in holdings” rating.

Risk warning:

The revenue confirmation process for offshore floating nuclear power plant equipment fell short of expectations; the bidding progress for nuclear power equipment fell short of expectations; the approval and commencement of new nuclear power projects fell short of expectations

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