Guangdong Hydropower (002060) 2018 Annual Results Express Commentary: Performance Meets Expectations to Benefit Guangdong-Hong Kong-Macao Greater Bay Area Construction Progress

Guangdong Hydropower (002060) 2018 Annual Results Express Commentary: Performance Meets Expectations to Benefit Guangdong-Hong Kong-Macao Greater Bay Area Construction Progress
Guide to this report: Based on the main business of engineering construction, the company will benefit from the advancement of the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and actively deploy clean energy business. It will also incorporate state-owned enterprise reform to improve quality and efficiency. The future business growth is worth looking forward to. Investment Highlights: Maintain overweight.The company released the 2018 performance report, with a net profit of about 2% (+ 27%) in line with expectations, maintaining the forecast of 0 EPS in 2018.17 yuan; considering the improvement of financing 北京桑拿洗浴保健 + infrastructure rebound + Guangdong-Hong Kong-Macao Greater Bay Area planning and release, subsequent high-level infrastructure construction space, raised forecast EPS to 0 in 2019/20.21/0.25 yuan (previously 0.2/0.(23 yuan) growth rate of 23/20%; considering the heightened risk + construction assessment and repair and assessment with reference to comparable companies in the industry, the company is given 20 times PE in 2019 with a target price of 4.2 yuan, overweight. Improved financing + rebound in infrastructure + Guangdong-Hong Kong-Macao Greater Bay Area promoted companies to maintain high growth.1) Q1-Q4 net profit per quarter is 0.23/0.4/0.27/1.11 ppm growth rate of 11/29/39/26%; 2) In January, data such as social financing improved significantly + local debt accelerated, and financing improvements will continue the upward trend of infrastructure growth; 3) Guangdong-Hong Kong-Macao Greater Bay Area planning and transportationInfrastructure / municipal engineering / ecological restoration is expected to accelerate the release. The company will fully benefit from the advantages of deep cultivation in the Pearl River Delta region. 4) The approval of rail transit restarts and resumes immediately. The amount immediately exceeds 1 trillion.Pay advantage or guarantee subsequent business growth. With ample orders in hand, the state reform is expected to improve quality and efficiency.1) According to the company’s announcement, as of the end of 2018, approximately 268 trillion uncompleted projects have been contracted with a 24% increase + 6.8 billion unsigned contracts have been contracted with a 30% increase, and the total revenue protection multiple for 2018 is approximately 3.9 times; 2) Hydropower Group, the controlling shareholder, plans to increase its shareholding of the company by no less than 1% and no more than 2% within six months from November 14, 2018, and has increased its shareholding by 1 until now.49%; 3) Guangdong State-owned Assets Supervision and Administration Commission approved the transfer of 100% equity of Hydropower Group to Construction Engineering Group for free, and made corresponding commitments to resolve and avoid competition with the construction industry group; 4) Optimize the layout of clean energy, and promote the advancement steadilyDevelopment, as of 2018H1, a total installed capacity of 904MW has been put into operation. Catalysts: Core risks such as steady growth in infrastructure growth, quality and efficiency improvements in state-owned enterprise reform: infrastructure growth, new growth in single-leaf growth, and less-than-expected progress 北京夜生活网 in state-owned enterprise reform