AVIC Securities released a research report sayingSharky35000For the first time, it covers CIMC Enrico (03899) and gives a "buy" rating. The company is expected to return to its parent net profit from 2024 to 2026.Sharky35000.6 / 16.3 / 1.81 billion, with a target price of HK $10.1. The company has a solid leading position in the clean energy industry, the growth of natural gas production and sales and the rapid development of hydrogen energy industry, driving the demand for industrial chain equipment and engineering services. The chemical environment and liquid food business as a whole is expected to grow steadily, and progress in new business areas is expected to exceed expectations. In addition, H shares are undervalued as a whole, global capital flows are expected to improve liquidity in the future, and high-quality companies are expected to take the lead in valuation repair.
The main points of AVIC Securities are as follows:
Clean energy and chemical tank equipment are industry-leading, the global layout of the industry is perfect, and it has both growth and dividend value.
Relying on the core pressure vessel and temperature control technology, the company has developed into a leader in clean energy, chemical environment and liquid food. The company's clean energy sector contributed more than 60% of its revenue in 2023, covering natural gas, liquefied petroleum gas, hydrogen and other gas industry chains, while the chemical environment and liquid food equipment accounted for a similar proportion of revenue contribution.
Through the integration of global resources, the company has gradually established the global layout of the three major sectors of business, as well as a pattern of considerable revenue contribution from overseas and domestic markets. The proportion of income contribution in 2023 is 48.5% overseas and 51.5% domestic.
In 2023, the company's operating income was 23.63 billion yuan, year-on-year + 20.5%, and home net profit was 1.11 billion yuan, + 5.6% compared with the same period last year. The performance growth was mainly driven by revenue growth in the clean energy sector, as well as achievements in overseas markets and new business development. From 2020 to 2023, the company's revenue and return net profit CAGR are both about 15% and 5% respectively, mainly due to the chemical environment, the global expansion of liquid food business, and the deepening of clean energy business layout and operation. The company's dividend ratio has remained above 38% since 2019 and reached a new high of about 49% in 2023.
Clean energy: benefit from the improvement of the global natural gas industry, actively open up new business type and overseas markets, hydrogen energy and green methanol business potential
Global low-carbon transformation superimposed oil and gas price gap to maintain high, driving up the demand of the natural gas industry chain. It is expected that both ends of global natural gas production and sales will steadily expand in 2024. The company's clean energy business covers the production, processing, transportation and terminal application of natural gas and liquefied petroleum gas, with revenue of 14.91 billion yuan in 2023, + 40.8% year on year, and gross profit margin of 12.8%.
1) Land clean energy: realize the layout of the whole industry chain around natural gas, the main products include LNG, LPG, CNG and industrial gas storage and transportation equipment, leading production and sales in the domestic market. Benefiting from the acceleration of domestic oil-to-gas and coal-to-gas processes, land-based clean energy revenue in 2023 was 12.01 billion yuan, 35.1% of the same period last year, accounting for about 81% of clean energy sector income.
In the business areas related to upstream processing and operation, the business scope is broadened through the development of non-traditional gas sources through rich gas source channels and the establishment of multiple production bases, and the LNG project of hydrogen production from coke oven gas is successfully replicated quickly. In the field of mid-stream storage and transportation equipment and business engineering, we will develop new businesses such as natural gas and LNG emergency peak-shaving reserve projects. In the field of terminal quotation, due to the rapid implementation of the heavy truck national 6B standard to boost the sales of natural gas heavy trucks, the company's order for LNG automotive bottles increased by nearly 39 times in 2023. Overseas actively distributed business in Africa, Saudi Arabia and other regions, and made positive progress in overseas engineering projects. In 2023, the revenue of overseas land-based clean energy business reached 2 billion yuan, + 30% compared with the same period last year, a record high.
2) Water clean energy: the green upgrading of global shipping and the strong demand for clean energy to replace traditional fuel vessels have led to the continuous growth of orders for fuel tank equipment such as the company's ships and LNG. As the leader in the market segment of small and medium-sized LPG carriers with the highest market share in the world, the company's aquatic clean energy business revenue in 2023 is 2.2 billion yuan, + 74% compared with the same period last year, accounting for about 15% of the clean energy sector revenue. In 2023, the company's ship-on-hand order is about 9.6 billion yuan, and the LNG marine fuel tank order is nearly 2 billion yuan (year-on-year + 142%). In the early stage, with sufficient shipbuilding capacity through mergers and acquisitions, and relying on professional shipbuilding capacity to enrich the product line, it is expected to continue to benefit from the global demand for clean energy ships in the future.
3) hydrogen energy and green methanol: hydrogen energy product line covers the whole industry chain, such as manufacturing, storage, transportation, addition, application, etc., basically covering all pressure levels and application scenarios. Benefiting from the warming of the global hydrogen energy industry, the company's hydrogen energy business orders have doubled in recent years. The CAGR of the company's hydrogen energy business income reached 76.5% from 2020 to 2023, and revenue innovation reached 700 million yuan in 2023, + 59.0% of the same period last year. The hydrogen energy industry has great potential for development, and the company is expected to fully benefit from the upward prosperity of the industry.
Methanol as a marine alternative fuel has made substantial progress, and Maersk's first green methanol fuel ship sailed successfully in 2023. The global green methanol industry is expected to usher in a breakthrough. The company has locked in more than 1 million tons of biomass resources and landed the first project in Guangdong with partners, which is expected to be replicated quickly based on fuel ethanol plants.
Chemical environment: the overall demand for cans is stable, and breakthroughs have been made in new businesses such as post-market services and medical equipment.
As the global tank leader, the company's chemical environment plate was affected by 4.41 billion yuan in 2023, about-17% compared with the same period last year. With the global economic recovery and the increase in chemical prices, the global demand for chemical tanks is expected to grow steadily in 2024, which is expected to support the steady growth of the company's chemical environment plate business. Z/oo
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The share of domestic market revenue in the chemical environment sector has increased from 8.3% in 2022 to 12.2% in 2023. The company has made progress in the can rear market and medical equipment business, with revenue exceeding 100 million yuan (year-on-year + 39.2%) and 200 million yuan (year-on-year + 20.3%) respectively in 2023.
Liquid food: overseas beer business is steady and steady, and progress has been made in new business areas such as spirits and biopharmaceuticals.
As the world's leading food equipment and engineering supplier, the company has accumulated high-quality overseas customer resources and completed global production capacity layout. In 2023, the revenue of the liquid food sector will reach 4.29 billion yuan, a year-on-year +18.6%. In 2023, new signings and on-hand orders in the liquid food business hit a new high, and the overseas beer turnkey project is progressing smoothly. The overseas beer business is the focus of the liquid food business. It has high-quality customer resources and a complete global production and marketing network. It is expected to benefit from the rising prosperity of the wine and beverage industry. The company has also made efforts to expand the spirits and biopharmaceutical equipment market, making breakthroughs in domestic liquor and whisky projects and inhalation mixing system equipment. In the past two years, the non-beer business has achieved remarkable results in expansion, and its revenue share in the liquid food sector has expanded to more than 25%.
Risk warning: The global economic boom affects downstream demand; large fluctuations in exchange rates and raw material prices affect the company's profits; and the development of new business falls short of expectations.