NORINCO International(SZ:000065) Haitong Securities·2024-03-21 16:00Investment Rating - The report assigns an "Outperform" rating to the company [9][29]. Core Views - The company is recognized as a platform for the internationalization of civilian products under the Weaponry Group, with significant support from its major shareholder. The transformation into an integrated investment and operation model has shown remarkable results, indicating promising future performance [29][33]. - The company has a strong presence in international engineering contracting, with a substantial increase in revenue from this segment, reflecting its role as a key player in the Belt and Road Initiative [33][29]. Financial Summary - Revenue Forecast: The company’s revenue is projected to grow from 13,433 million CNY in 2022 to 18,988 million CNY in 2023, representing a year-on-year growth of 41.4% [4][31]. - Net Profit Forecast: The net profit is expected to increase from 636 million CNY in 2022 to 853 million CNY in 2023, a growth of 34.1% [4][31]. - Earnings Per Share (EPS): The EPS is forecasted to rise from 0.63 CNY in 2022 to 0.85 CNY in 2023 [4][31]. - Gross Margin: The gross margin is expected to be 12.6% in 2023, slightly down from 13.7% in 2022 [4][31]. Project Highlights - Croatia Wind Power Project: The company holds a 76% stake in a 156MW wind power project in Croatia, with an internal rate of return (IRR) of 10.65%. The project has been operational since December 2021 and is expected to generate significant revenue [13][29]. - Laos Hydropower Project: The company has an 85% stake in the Laos Nam Phak hydropower station, which has been operational since 2017. The project is expected to contribute positively to the company's revenue [17][29]. - Bangladesh Thermal Power Project: The company is involved in a 1320MW supercritical coal-fired power project in Bangladesh, with a projected operational start in the second half of 2024. The project is expected to have a favorable impact on future earnings [20][29]. Business Segments - International Engineering Contracting: This segment has seen a significant increase in revenue, with a growth rate of 313.45% in the first half of 2023. The company anticipates continued growth in this area [26][33]. - Power Generation Revenue: The revenue from power generation is expected to grow at a slower pace, with projected increases of 5% annually from 2023 to 2025 [26][33]. - Commodity Trading: The company’s commodity trading segment is projected to grow significantly, with a forecasted revenue increase of 40% in 2023 [27][33].