\u3000\u30 Guangdong Tengen Industrial Group Co.Ltd(003003) 54 Donghua Testing Technology Co.Ltd(300354) )
Event: the company released the annual report of 2021.
PHM, electrochemistry and other businesses are gradually in large quantities, and the delayed confirmation of orders affects the current revenue
In 2021, the company achieved operating revenue of RMB 257 million, with a year-on-year increase of 25.22%, of which Q4 achieved revenue of RMB 92 million, with a year-on-year increase of 0.18%, slightly lower than the market expectation. We judge that it is mainly due to the impact of the epidemic and the delayed confirmation of some orders. ① By product: in 2021, the static strain test and analysis system and dynamic signal test and analysis system achieved revenue of 35 million yuan and 149 million yuan respectively, with a year-on-year increase of 14.38% and 28.96% respectively. Among them, the dynamic signal test and analysis system performed well and was the main driving force for the steady growth of the company’s revenue. Accessories and other and development services achieved 60 million yuan and 13 million yuan respectively, with a year-on-year increase of 23.99% and 21.22% respectively. ② From the perspective of business, the parent company Donghua Testing Technology Co.Ltd(300354) is mainly responsible for structural mechanical property testing, while the subsidiaries Donghao testing and Donghua analysis are respectively responsible for PHM intelligent maintenance platform and electrochemical business. In 2021, the parent company realized a revenue of 222 million yuan, with a year-on-year increase of 17.15%. The traditional structural mechanical property test business grew steadily, mainly benefiting from the higher landscape of the military industry and import substitution; In 2021, Donghao test achieved a revenue of 43.64 million yuan, an increase of 160% year-on-year, mainly due to the increasing attention and application of PHM, and the significant increase in military PHM revenue during the reporting period; In 2021, Donghua analysis realized a revenue of 7.04 million yuan, which was only 640000 yuan in the same period of 2020. If we consider part of the sales of the parent company, we judge that the total revenue of the company’s electrochemical business in 2021 exceeded 20 million yuan. Therefore, it can be seen that the new businesses such as military PHM and electrochemistry have gradually increased in volume, which strongly supported the steady growth of the company’s revenue in 2021.
The effect of reducing fees and controlling costs is remarkable, and the profitability will be significantly improved in 2021
In 2021, the company realized a net profit attributable to the parent company of RMB 800239 million, with a year-on-year increase of 58.91%; The net profit attributable to the parent company after deduction was 770391 million yuan, with a year-on-year increase of 73.57%, basically in line with market expectations. In 2021, the company’s net profit margin was 31.13%, with a year-on-year increase of 6.6pct, and the profit level increased significantly. Further analysis: ① at the gross profit margin side, the gross profit margins of static strain test and analysis system, dynamic signal test and analysis system, accessories and other gross profit margins in 2021 were 64.98%, 69.07% and 61.08% respectively, with a year-on-year increase of + 0.95pct, + 0.59pct and + 5.16pct respectively, Promote the overall gross profit margin of the company to increase by 1.72 PCT to 67.79% in 2021; ② Expense side: during 2021, the expense rate was 37.44%, with a year-on-year rate of -4.97 PCT, and the sales / Management (including R & D) / financial expense rate was -2.85 PCT / – 2.16 PCT / + 0.05 PCT respectively. The decline in the sales and management expense rate was mainly due to the scale effect, and the decline in the expense rate during the period was the most important factor to improve the profitability in 2021.
The main business of structural mechanics continues to grow rapidly, and PHM + electrochemistry opens up growth space
While stabilizing the leading position of structural mechanical property testing system, the company actively expands the field of PHM & electrochemical workstation and further opens up the growth space. ① Structural mechanical property test: compared with the overseas leading American Ni, the company’s revenue and profit scale are obviously small, and there is still a large growth space. Driven by the high prospect of the military industry and independent control, it is expected to maintain rapid growth; ② PHM (fault diagnosis and health management): it is the core technology of modern weapons and equipment and has broad application prospects in civilian markets such as intelligent manufacturing. The company is one of the few private enterprises in China that fully master the core technology of PHM and has great growth potential; ③ Now, a series of strategic energy workstations and electrochemical companies have been formed to meet the needs of commercialization, and a series of new energy products will be formed.
Profit forecast and investment rating: considering the significant improvement of the company’s profitability, we adjusted the forecast of net profit attributable to parent company from 2022 to 2023 to 144 million yuan (up 4.16%) and 216 million yuan (up 6.36%) respectively. It is estimated that the net profit attributable to parent company in 2024 will be 302 million yuan, and the corresponding dynamic PE of current stock price will be 30, 20 and 14 times respectively. As the leader of local structural mechanical property test, the company fully benefited from the general trend of military industry autonomy, superimposed a large number of new products, with outstanding growth, and maintained the “buy” rating.
Risk tips: industry competition intensifies, profitability declines, new business development & industrialization progress is less than expected, revenue recognition is seasonal, etc.
