Guodian Nanrui (600406) incident comment: 1.7 billion orders landing market share increased significantly

Guodian Nanrui (600406) incident comment: 1.7 billion orders landing market share increased significantly

Event: The State Grid Tendering Platform released the “Announcement of Successful Candidates Recommended for the First Equipment Bidding and Procurement of the Yazhong-Jiangxi UHV Project in 2019”, a total of 71 in this tender.

4.7 billion yuan, its China Power NARI won the bid 17.

5.6 billion yuan, with an 夜来香体验网 overall share of 24.

6%.

The successful candidates were announced as the third UHV DC tender since March this year. In the previous two tenders, NARI won 19 bids respectively.

3.1 billion, 0.

3.9 billion yuan, accounting for 12.

6% / 6.

At 7%, the percentage of NARI’s winning bids increased significantly. The converter valve was first installed, and the DC protection system was increased from about 50% to 100%, which was more than expected.

The gross profit margin of the products awarded by NARI this time is expected to be more than 40%, and the performance will be mainly realized in 2020 and 2021, which will increase NARI’s performance in total.

5ppm-4ppm (net margin 20%), based on 2018 results, the elasticity is 8.

4% -9.

6%.

In the second half of the year, it is expected that two UHVDCs from 合肥夜网 Baihetan-Jiangsu and Zhejiang will be successively tendered. NARI is expected to win additional bids of 1.8-2 billion. It is expected that the five UHV DCs approved in 2018 will complete the bidding in 2019.

It is estimated that the total winning bids of five NARI UHVs in 2019 will be about US $ 4-5 billion, and the total net profit will be US $ 800-1000 million. Based on the 2018 performance, the flexibility is 19.

2% -24.

0%.

Investment suggestion: We estimate that Guodian NARI’s net profit for 2019-2021 will be 44.

56, 54.

94, 65.

9.4 billion yuan, with annual growth rates of 7.

1%, 23.

3%, 20.

0%.

EPS are 0.

96, 1.

19, 1.

43 yuan, PE corresponding to the closing price of September 18, 2019 are 20.

6, 16.

7, 13.

9 times, maintain prudent overweight rating.

Risk Warning: Ubiquitous Electricity Internet of Things Investment Expects Less Than Expected, UHV Construction Investment Doesn’t Than Expected, Risks of Slowing Macroeconomic Growth