Guodian Nanrui (600406) Annual Report Comments: UHV Redemption Now Adds 天津夜网 Power to Ubiquitous Network
The leader in power secondary equipment set off again, maintaining the “Buy” rating company’s 18-year revenue of 285.
400 million (+17.
76%), net profit attributable to mother 41.
6.2 billion (+28.
44%), 37 revenue in 19Q1.
50,000 yuan (one year -2.
41%), net profit attributable to mother 0.
7.7 billion (-18.
81%), 18-year performance exceeded expectations, 19Q1 was mainly affected by changes in the provision of bad debts and the temporary decline in Q1 investment in the power grid.
The company is an important software and hardware leader for the strong smart grid and ubiquitous electric power Internet of Things. We expect the company’s EPS to be 1 in 19-21.
25 and 1.
45 yuan, maintain “Buy” rating.
The performance of ICT business is dazzling, and it is expected to 成都桑拿网 continue to benefit from the power grid information construction in 2018, the operating income of power automation information and communication business38.
23 yuan (previously +34.
19%), gross margin of 27.
68pct), the company’s scheduling informationization, breakthroughs in research and development and sales of new product network security management platforms and monitoring devices, rapid revenue growth, and technological advantages drove the company’s ICT business gross margin to increase significantly.
As a leader in secondary equipment, the company has strong software and hardware development capabilities. Combining the company’s ICT business with power dispatching equipment, the company has obvious advantages in the field of power grid dispatching at the perception layer and the application layer.
As the basic level of the ubiquitous power IoT construction, the perception layer is driven by the ubiquitous power IoT. The company’s 19-year ICT business has promoted continuous growth.
UHV performance is expected to continue to materialize, and the grid automation business is growing steadily. In 2018, the company’s operating income from relay protection and flexible transmission business53.
77 yuan (in the past +4.
32%), gross margin 38.
2pct), benefiting from the resumption of UHV construction in September 2018, the company’s operating income has grown rapidly, and increased competition has led to a decline in gross profit margin.
We believe that through the tendering of UHV lines, the performance of relay protection and transmission is expected to gradually materialize in 19 years.
Benefiting from the continued growth of smart grid investment and the increase in the proportion of high-value integrated turnkey services, grid automation and industrial control revenues were 167.
560 thousand yuan (ten years +23.
7%), gross margin 28.
37pct), with rapid revenue growth and a slight decline in gross profit margin; we believe that with the advent of smart meter replacement, the grid automation business will continue to grow steadily.
During the 18-year period, the expense ratio decreased slightly, and changes in bad debt accrual arrangements dragged down the profit company’s 18-year period.
50,000 yuan (ten years -37.
8%), and the expense ratio during the sales period is 12.
6%, (year -1.
1pc), cost 18 during 19Q1.
10,000 yuan (ten years -53.
1%), the expense ratio during the period is 23.1% (twice +2.
4pct), the cost and rate doubled during the 18-year period, and the rate rose slightly during the 19Q1 period.
Specifically, the company’s 18-year management expense ratio is 7.
64% (one year-0.
35pct), financial expense ratio -0.
31% (one year-0.
69pct), management capabilities have been improved, and financial expense ratios have fallen sharply due to foreign exchange gains.
Since April 2018, the company has adopted different accrual methods for national network customers and customers outside the national network. According to company estimates, changes in accounting measurement have dragged down profit growth for 18 years3.
UHV performance is gradually fulfilled. Generally, online construction helps boost momentum. The company maintains a “buy” rating as a leader in secondary equipment. In 19 years, it entered the UHV performance redemption period, expanding its advantages in the field of ICT business expansion, and promoting rapid growth in performance.
We adjusted the company’s net profit attributable to its parent to 49 in 19-21.
7 and 66.
800 million (number from 19-20 years ago 45.
8 and 51.
800 million), comparable companies’ average PE in 19 years was 29.
46 times, taking into account the penetration of the leading market value and the shift in the focus of the power grid, giving the company a 23-25 times PE estimate for 19 years, and a target price of 24.
75 yuan, maintain “Buy” rating.
Risk warning: The investment and construction of the power grid exceeds expectations; the UHV construction progress is slower than expected.