China and even the world's first brand of water conservancy and hydropower: There are 10 domestic enterprises with special qualifications for water conservancy and hydropower project construction, of which 8 are China Hydro and its wholly-owned subsidiaries. The company's market share in domestic large and medium-sized water conservancy and hydropower projects has been stable at 65% for a long period of time. It ranks among the top 3 in the ranking of domestic and foreign engineering contracting companies, and has risen to 24th among global international contractors in 10 years.
In the ten years of gold development in the domestic water conservancy sector, orders from overseas markets are blowout: the 11th Central Document and the Central Water Conservancy Work Conference laid the foundation for the next decade to be the domestic water development period; the overseas business is developing smoothly and the new overseas water conservancy will be signed in 10 years. The amount of hydropower contracts increased by 96% year-on-year. As the leader of water conservancy and hydropower, the company will be able to enjoy the rising prosperity of water conservancy and hydropower construction.
Relevant diversified development improves profitability: The company extends to the main business from the upstream to the downstream with higher gross profit margins: gross margin of power investment and operation business is above 30%, 10% revenue contribution is 2.2%, and gross profit contribution is 10.6%. It is an important profit growth point in the future; equipment manufacturing and leasing business can improve the company's equipment level, ensure the smooth construction of the project, reduce investment in equipment resources, and improve the efficiency of equipment use; the equity RNAV of real estate business under construction and proposed projects is 2.55 billion yuan, equivalent 0.27 yuan per share. The deepening of related diversified development can effectively improve the company's profitability.
Reasonable price range of 4.63 to 5.62 yuan: It is expected that the company's 11 and 12-year EPS will be 0.40 and 0.52 yuan respectively, and the corresponding growth rates will be 30% and 32% respectively. Considering that the company is a leader in water conservancy and hydropower in China and even in the world, and the next decade is the rising stage of China's water conservancy industry, coupled with asset injection expectations, we have given a valuation cap of 16 times to the water conservancy and hydropower project contracting business. After the valuation, we believe that the reasonable price range is between 4.73 and 5.67 yuan and the reasonable price center is at 5.05 yuan.
In the ten years of gold development in the domestic water conservancy sector, orders from overseas markets are blowout: the 11th Central Document and the Central Water Conservancy Work Conference laid the foundation for the next decade to be the domestic water development period; the overseas business is developing smoothly and the new overseas water conservancy will be signed in 10 years. The amount of hydropower contracts increased by 96% year-on-year. As the leader of water conservancy and hydropower, the company will be able to enjoy the rising prosperity of water conservancy and hydropower construction.
Relevant diversified development improves profitability: The company extends to the main business from the upstream to the downstream with higher gross profit margins: gross margin of power investment and operation business is above 30%, 10% revenue contribution is 2.2%, and gross profit contribution is 10.6%. It is an important profit growth point in the future; equipment manufacturing and leasing business can improve the company's equipment level, ensure the smooth construction of the project, reduce investment in equipment resources, and improve the efficiency of equipment use; the equity RNAV of real estate business under construction and proposed projects is 2.55 billion yuan, equivalent 0.27 yuan per share. The deepening of related diversified development can effectively improve the company's profitability.
Reasonable price range of 4.63 to 5.62 yuan: It is expected that the company's 11 and 12-year EPS will be 0.40 and 0.52 yuan respectively, and the corresponding growth rates will be 30% and 32% respectively. Considering that the company is a leader in water conservancy and hydropower in China and even in the world, and the next decade is the rising stage of China's water conservancy industry, coupled with asset injection expectations, we have given a valuation cap of 16 times to the water conservancy and hydropower project contracting business. After the valuation, we believe that the reasonable price range is between 4.73 and 5.67 yuan and the reasonable price center is at 5.05 yuan.
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