\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 75 Tianjin Jieqiang Power Equipment Co.Ltd(300875) )
Event:
The company announced on April 22 that in 2021, the operating revenue was 198 million yuan, a year-on-year decrease of 26.19%; The net profit attributable to shareholders of listed companies was 31 million yuan, a year-on-year decrease of 69.03%. In 2022q1, the operating revenue was 14 million yuan, a year-on-year increase of 132.46%; The net profit attributable to listed shareholders decreased by -6.92 million yuan year-on-year.
Key investment points:
Multiple factors of performance decline have led to pressure on the company’s share price. First, as the first year of the 14th five year plan, affected by the socio-economic environment and changes in customer ordering plans, the implementation of some product orders was delayed in 2021, and the sales revenue of the hydraulic power system, the core component of the washing equipment, was 660324 million yuan, a year-on-year decrease of 72.86%, and the sales scale decreased year-on-year; Second, the company increased R & D investment and marketing expansion, with R & D expenditure of 404135 million yuan, a year-on-year increase of 43.50%, and marketing expenses of 9.7816 million yuan, a year-on-year increase of 125.25%; Third, the administrative expenses increased by 83.18% year-on-year due to the increase of depreciation expenses arising from the operation of new plants.
R & D investment increased significantly and the product structure continued to be optimized. During the reporting period, R & D investment accounted for 20.39% of operating revenue, 42 new patents and 48 software copyrights; By the end of last year, the company’s technology R & D team had 150 people, accounting for 37.69% of the company’s total employees. The company has carried out extensive industry university research cooperation, improved the transformation efficiency of technical achievements, carried out product research and development, and reserved a large number of new products, new technologies and solutions to major key problems in the field of nuclear, biochemical and safety, further enriching the variety of products. Among them, the sales revenue of nuclear, chemical and biological safety reconnaissance equipment (biological detection and radiation monitoring equipment) was 610281 million yuan, a year-on-year increase of 100.00%; The sales revenue of technical services of nuclear, chemical and biological equipment was 313309 million yuan, a year-on-year increase of 237156%.
Actively lay out the whole industrial chain and speed up the process of military to civilian conversion. The main business direction of the company is R & D, production and sales of nuclear and biochemical equipment and safety services. During the reporting period, through the acquisition of Hongjin Jiuan, Shanghai Renji and Huashi Ronghui, the company participated in the private placement of riles and the investment in the construction of Tianjin Jieqiang Power Equipment Co.Ltd(300875) military and civilian dual-use manufacturing center (Mianyang) project for strategic layout, and the layout of nuclear, chemical and biological safety industry achieved initial results. The company has initially completed the “reconnaissance, protection and decontamination” series products in the field of nuclear, chemical and biological safety equipment, with increasing development potential, and the business synergy will be gradually formed and continuously released in the future, further contributing to the company’s future development strategy of “providing nuclear, chemical and biological safety equipment mainly for military needs to providing overall solutions and professional services for nuclear, chemical and biological public safety and environmental protection”.
We won the bid for the biological detection project, and the raised investment project progressed smoothly. In March this year, the company won the bid for the military biological inspection vehicle project. The subsequent implementation of the project is expected to have a positive impact on the company’s future business performance and market development. In 2022, the production and construction project of military cleaning and disinfection equipment and the construction project of R & D center have been completed and reached the intended use status. The construction of new chemical prevention equipment and emergency rescue equipment industrialization project and chemical prevention equipment maintenance support and emergency rescue test base project is steadily advancing. In 2022, the company plans to complete the phase I project transformation of the base of dual-use manufacturing center (Mianyang), establish and improve the production base of nuclear, biochemical and safety equipment and supporting products of large scientific equipment, further build the whole industrial chain system of nuclear, biochemical and safety equipment, and enhance the core competitiveness of the company.
Investment suggestions:
The company is a leading enterprise in the field of nuclear, chemical and biological safety in the military industry, and has a complete technical system in various professional directions such as “reconnaissance, protection and decontamination” in the field of nuclear, chemical and biological safety. Due to the reality, complexity and severity of the nuclear, chemical and biological threat, the special requirements for military equipment, superimposed with the upgrading of the needs of special security fields such as fire fighting, armed police and emergency rescue, will further enhance the market space of the nuclear, chemical and biological security industry. Through the endogenous growth means of increasing R & D investment and expanding market channels, the company combines the epitaxial development of the whole industrial chain layout of nuclear, chemical and biological production, which is expected to gradually improve the scale of revenue and profit quality.
We predict that the operating revenue of the company from 2022 to 2024 will be 367 / 484 / 624 million yuan respectively, and the net profit attributable to the parent company will be 1 / 129 / 157 million yuan respectively, corresponding to EPS of 1.3/1.68/2.05 and PE of 33 / 26 / 21 times. Give a “buy” rating and suggest continuous attention.
Risk tips:
The macroeconomic downturn leads to the decline of market demand: the risk of technology research and development falling short of expectations; The risk that the development of civil products market is less than expected.
