Runa Smart Equipment Co.Ltd(301129) (301129)
Key investment points
Intelligent heating overall solution supplier with software and hardware integration capability. The company is an integrated intelligent heating solution supplier integrating “automation + informatization + intelligence” technology, with the ability of “product solution service” software and hardware integration. The revenue from 2018 to 2020 was 210 million yuan, 350 million yuan and 420 million yuan respectively, and the CAGR reached 41.8%. The company’s main products include heating energy-saving products, heating energy-saving schemes and heating energy-saving services, accounting for 69%, 24% and 7% of its main revenue in 2020. The company is deeply rooted in Shandong and continues to strengthen market development in North China, Northwest China, central China and other regions. In 2020, the revenue outside Shandong Province will reach 135 million yuan, an increase of 31.213 million yuan over 2019, a year-on-year increase of 30.06%.
Benefiting from the policies to promote the intelligent upgrading of heating and energy-saving equipment and the improvement of product structure, the company realized a net profit attributable to the parent company of 130 million yuan in 2020, with a year-on-year increase of 34.1%; The gross profit margin was 56.4%, a year-on-year increase of 1.7pct; The net interest rate was 31.29%, a year-on-year increase of 3.4pct. The company has built an intelligent hardware product line covering the core links of the thermal system and an intelligent heating software management platform, so as to achieve strong profitability. In terms of products, the gross profit margins of heating energy-saving product sales, heating energy-saving schemes and heating energy-saving services in 2020 are 59.1%, 47.1% and 61.9% respectively.
The dual carbon policy gives birth to the demand for heating and energy saving. According to the data of the National Bureau of statistics, China’s urban central heating area increased from 4.738 billion square meters in 2011 to 9.251 billion square meters in 2019, with a CAGR of 8.72%, driving the continuous growth of demand for heating and energy-saving equipment. The information and intelligence level of traditional heating is low, and the heat loss is serious; Under the background of carbon peak, the construction of new urban housing continues, and the contradiction between the growth of urban heat source demand, the rise of energy cost and carbon reduction is prominent. Therefore, an efficient and energy-saving “automation + informatization + intelligence” intelligent heating system is the only way to reduce carbon emissions. With the issuance of the notice of the State Council on printing and distributing the comprehensive work plan for energy conservation and emission reduction in the 13th five year plan and the introduction of double carbon and other policies, the national energy conservation and emission reduction has been continuously strengthened, and the energy-saving transformation of existing residential buildings and the demand for new intelligent heating will be strengthened. The stock market transformation and incremental market will gradually bring a broad market space of nearly one trillion scale.
Smart heating is a leading enterprise, fully benefiting from the growth of downstream demand. 1) The company’s products cover the complete industrial chain services of “energy measurement and data collection, energy intelligent control, data interaction and analysis management, and energy-saving services”, which can effectively help customers improve energy utilization efficiency and management efficiency, reduce production costs, management costs and potential safety hazards. Taking the contract energy management project of Zaozhuang Thermal Power Corporation as an example to provide customers with the energy-saving effect after the transformation of heating system, the energy-saving revenue sharing ratio from the first year to the seventh year is 80%, 80%, 70%, 60%, 50%, 40% and 0% respectively. From 2018 to 2020, the company recognized revenue of 12.3594 million yuan, 14.6410 million yuan and 14.037 million yuan respectively, showing good energy-saving benefits, And the customer has turned losses into profits; 2) The company’s products and technical solutions have been adopted by China’s leading large thermal companies such as Beijing thermal power, Taiyuan thermal power and Xi’an thermal power, and help them improve energy utilization efficiency. In addition to Shandong market, the company is expected to gradually explore different markets in the future, so as to open up market space; 3) The company is a rare enterprise in the industry to provide the overall solution ability of hardware such as heat meter and heating management system, which can meet the needs of customers to the greatest extent. With the implementation of IPO raised investment projects, the company will fully benefit from the increased demand for heating and energy conservation brought by the double carbon policy.
Investment advice
It is estimated that the company will achieve revenue of 510 million yuan / 707 million yuan / 987 million yuan and net profit of 165 million yuan / 237 million yuan / 330 million yuan in 2021-23. The company is a leading enterprise in the smart heating industry and a rare enterprise in the field that can provide integrated software and hardware solutions at the same time. The company’s intelligent heating overall solution can help achieve the goal of energy conservation and emission reduction. Under the dual carbon policy, it will directly benefit from the increase of energy conservation demand and is optimistic about the company’s long-term development prospects. For the first time, give a “buy” rating.
Risk statement
The intensification of industry competition and the cycle of the real estate industry lead to less than expected new demand and less than expected transformation progress of the stock market.
