标题：Jinggong Steel BuildingSteel structure leader; green integrated building & distributed PV
发布日期：2016-02-25 7:14:02
内容： Investment positives With leading technological strength and strong brand influence, Jinggong is the leader in China’s steel structure sector.As the government strives to promote “green buildings” and industrialization in construction, Jinggong’s steel structurebusiness enjoys huge growth potential; its green integrated building business would see fast growth. Moreover,Jinggong is actively expanding into distributed PV and the business is becoming a new growth driver. Steel structure business to see short-term pressure but huge growth potential over the long run. Asinvestment growth slows down, the company’s steel structure business would keep declining in the medium/short term.However, over the long run, its steel structure business would maintain growth momentum thanks to further progress inurbanization, manufacturing’s relocation to central/western China, emergence of new sectors like modern agriculture,e-commerce and logistics, rapid growth in infrastructure like high-speed railways, airports and theaters & stadiums andcontinuous progress in the “One Belt, One Road” strategy. Marketing efforts started for green integrated building business. Jinggong’s prefabricated multi-story steelstructure integrated building system has gained government approval and has been successfully applied to schools,office buildings, etc. The company would shift its products from steel structure components to steel structure buildingsand change its role from a subcontractor into a general contractor; both its business scale and profitability would seevisible improvement. With policy support, marketing efforts for this business would make rapid progress. Expanding into distributed PV with advantageous rooftop resources. As the company has built a large numberof quality factories for other enterprises, it enjoys inherent advantages in terms of rooftop resources for distributed PV.A 45%-owned subsidiary is responsible for project investments and Jinggong is responsible for project construction. In2015, Jinggong acquired 65MW of PV power station projects; it will likely acquire >200MW of projects in 2016. Financials Over 2015~2017, the company’s net profit will likely reach Rmb267mn (+0.3% YoY), Rmb283mn (+6.0% YoY) andRmb346mn (+22.3% YoY), implying EPS of Rmb0.18, Rmb0.19 and Rmb0.23, respectively. Valuation and recommendation Initiate coverage with HOLD. Jinggong’s earnings would see steady growth in the short term; given the marketingefforts for its green integrated building business, a ramp-up in its distributed PV EPC business, the company enjoysgood growth potential in the long run. We set its TP at Rmb5.6 (30x 2016e P/E), implying 11% upside. Risks Investment growth keeps falling; progress in new businesses disappoints.
发布日期：2016-02-25 7:14:02
内容： Investment positives With leading technological strength and strong brand influence, Jinggong is the leader in China’s steel structure sector.As the government strives to promote “green buildings” and industrialization in construction, Jinggong’s steel structurebusiness enjoys huge growth potential; its green integrated building business would see fast growth. Moreover,Jinggong is actively expanding into distributed PV and the business is becoming a new growth driver. Steel structure business to see short-term pressure but huge growth potential over the long run. Asinvestment growth slows down, the company’s steel structure business would keep declining in the medium/short term.However, over the long run, its steel structure business would maintain growth momentum thanks to further progress inurbanization, manufacturing’s relocation to central/western China, emergence of new sectors like modern agriculture,e-commerce and logistics, rapid growth in infrastructure like high-speed railways, airports and theaters & stadiums andcontinuous progress in the “One Belt, One Road” strategy. Marketing efforts started for green integrated building business. Jinggong’s prefabricated multi-story steelstructure integrated building system has gained government approval and has been successfully applied to schools,office buildings, etc. The company would shift its products from steel structure components to steel structure buildingsand change its role from a subcontractor into a general contractor; both its business scale and profitability would seevisible improvement. With policy support, marketing efforts for this business would make rapid progress. Expanding into distributed PV with advantageous rooftop resources. As the company has built a large numberof quality factories for other enterprises, it enjoys inherent advantages in terms of rooftop resources for distributed PV.A 45%-owned subsidiary is responsible for project investments and Jinggong is responsible for project construction. In2015, Jinggong acquired 65MW of PV power station projects; it will likely acquire >200MW of projects in 2016. Financials Over 2015~2017, the company’s net profit will likely reach Rmb267mn (+0.3% YoY), Rmb283mn (+6.0% YoY) andRmb346mn (+22.3% YoY), implying EPS of Rmb0.18, Rmb0.19 and Rmb0.23, respectively. Valuation and recommendation Initiate coverage with HOLD. Jinggong’s earnings would see steady growth in the short term; given the marketingefforts for its green integrated building business, a ramp-up in its distributed PV EPC business, the company enjoysgood growth potential in the long run. We set its TP at Rmb5.6 (30x 2016e P/E), implying 11% upside. Risks Investment growth keeps falling; progress in new businesses disappoints.
