\u3000\u3000 Suzhou Sushi Testing Group Co.Ltd(300416) (300416)
Event: the company released the performance forecast for 2021, and the net profit attributable to the parent company is expected to be 173-197 million yuan, with a year-on-year increase of 40% – 60%; The net profit after deducting non recurring profit and loss is expected to be 152-177 million yuan, with a year-on-year increase of 51% – 75%. The main reasons for the improvement of performance are the rapid growth of comprehensive environmental test equipment and environmental reliability test service business, the further increase of the proportion of test service business in the main business income, and the significant improvement of the profitability of IC Verification and analysis service business.
The proportion of test service business income continues to increase, which is expected to drive the improvement of comprehensive gross profit margin: the company’s main businesses include test equipment manufacturing and test services. In terms of gross profit margin, the gross profit margin of the test service business has remained at 57% – 60% since 2018 and has maintained an upward trend year by year. The gross profit margin of the test equipment manufacturing business has remained at 33% – 37% since 2018. The test service business is significantly higher than the equipment manufacturing business. With the continuous expansion of the company’s test service business, it has developed into the company’s largest main business. The proportion of revenue from experimental service business with high gross profit margin continues to increase, which is expected to drive the improvement of comprehensive gross profit margin.
A solid customer base helps the company maintain its position in the industry and improve its product strength: the company’s test equipment and services are widely used, and its downstream customers are mainly distributed in China’s aerospace, electronic and electrical appliances, petrochemical industry, rail transit, automobile manufacturing, special industries, shipbuilding, colleges and Universities and scientific research institutes, Including China aviation industry group, Crrc Corporation Limited(601766) group, China Cssc Holdings Limited(600150) group, China Electronics Technology Group, Huawei and other high-quality customers. The company’s solid customer base has laid a solid market foundation and customer advantages for the company to maintain its industry position and the promotion of test service business and new products of test equipment.
Orderly expansion of production capacity and advance layout planning for follow-up development: in 2020, the company will build the North testing center project with its subsidiary Qingdao Guangbo as the main body, and the Wuhan laboratory project with Suzhou Suzhou test Guangbo Wuhan Branch as the main body, so as to strengthen the test services such as structural strength in North China and the technical level of vehicle environment and reliability test services in Central China. In 2021, we will focus on the expansion of Suzhou and Beijing laboratories, expand test equipment, further improve the company’s test service capabilities in integrated circuit material analysis, component failure analysis, component reliability verification analysis and component performance test, improve the efficiency of test service, and support the growth of the company’s test service business in the future.
Profit forecast, valuation and rating: according to the development trend of each business of the company and the construction planning of each laboratory, we believe that the proportion of revenue from test service business with high profit level of the company is expected to continue to increase, and the profitability of integrated circuit business is expected to continue to improve. Raise the company’s profit forecast for 2022 and 2023 to 241 million yuan (up 5.7%) and 313 million yuan (up 9.3%), with EPS of 0.85/1.10 yuan respectively, corresponding to the current share price PE of 34 / 26x respectively. At present, the company has formed a development situation of deep integration of equipment manufacturing and testing services and two wheel drive, and is optimistic about the rising space of the company’s performance and valuation. Maintain the company’s “buy” rating.
Risk warning: the risk of intensified market competition in the testing industry; Management risks caused by the continuous expansion of business scale; Risks of changes in industrial policies.
