\u3000\u3 China Vanke Co.Ltd(000002) 967 Guangzhou Grg Metrology&Test Co.Ltd(002967) )
Event: the company released its 2021 annual report, and achieved an operating revenue of 2.247 billion yuan, a year-on-year increase of 22.09%; The net profit attributable to the parent company was 182 million yuan, a year-on-year decrease of 22.6%, which was slightly lower than our expectation. It was mainly affected by the covid-19 epidemic and the delay of orders from major customers. At the same time, the fixed cost side such as employee compensation, depreciation and house rent increased rapidly.
Key investment points
Force special industry test business, with outstanding performance in electromagnetic compatibility testing
From the perspective of business in 2021: ① the traditional measurement sector achieved a revenue of 504 million yuan, a year-on-year increase of + 0.41%; ② The revenue of reliability and environment / electromagnetic compatibility testing business was 651 million yuan / 243 million yuan respectively, with a year-on-year increase of + 20.25% / + 33.11% respectively. We judged that the reason was that the company had obvious advantages in special industry test business, made new breakthroughs in new energy and new technology and developed major customers; ③ The revenue of environmental protection testing / food testing / chemical analysis business was 173 million / 159 million / 122 million respectively, with a year-on-year increase of + 10.57% / + 3.70% / + 0.85% respectively. ④ the revenue of EHS evaluation and consultation was 239 million yuan, with a year-on-year increase of + 178.16%.
The profit margin is under pressure in the short term and is optimistic about the recovery of profitability in 2022
In 2021, the company's comprehensive gross profit margin was 41.38%, with a year-on-year increase of -1.89pct. The gross profit margin of measurement business / reliability and environmental test / electrical test compatibility test / environmental protection test / food test / chemical analysis / EHS consulting business is 39.13% / 48.68% / 53.70% / 29.57% / 20.31% / 38.76% / 49.89% respectively. In the future, with the optimization and adjustment of the company's business structure, the company will test in special industries with high gross profit margin, electric test compatibility, promotion of EHS consulting business, expansion of enterprise clients and prominent superposition scale effect, and the profitability is expected to gradually recover.
In 2021, the company's expense rate during the period was 31.93%, with a year-on-year rate of -0.88pct, of which the sales / management / R & D / financial expense rate was 12.89% / 7.19% / 9.93% / 1.92% respectively, with a year-on-year rate of + 0.14pct / + 0.8pct / - 1.03pct/0.78pct respectively. In the future, as the company moves forward, focus on optimizing subsidiaries, integrate industry resources, improve operation and management efficiency, and reduce operation costs while ensuring high-quality business operation.
The third party tests high-quality targets and creates a comprehensive business pattern of "testing + scientific research + consulting services"
The company has 23 measurement and testing bases and more than 50 subsidiaries in China, which can provide "one-stop" testing services. The company has obvious advantages in the test business of special industries, and has made breakthroughs in the strategy of key customers and large projects. In the future, it will strengthen the layout of prospect detection sectors such as new energy vehicles, 5g base stations and aerospace, so as to create a new pattern of high-quality business development.
Profit forecast and investment rating: the extension of short-term orders does not change the development logic of the company. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 328 (former value 4.34) / 4.25 (former value 5.73) / 546 million respectively. The current market value corresponds to PE of 32.38/25.00/19.48 times, maintaining the rating of "overweight".
Risk warning: industry competition intensifies; M & A integration risk; Business adjustment is less than expected.
