\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 87 Pony Testing International Group Co.Ltd(300887) )
Event: Recently, the company released its 2021 annual report. In 2021, the company achieved a revenue of 2.007 billion yuan, a year-on-year increase of 40.70%, and a net profit attributable to the parent company of 220 million yuan, a year-on-year increase of 34.54%. The basic earnings per share is 1.61 yuan.
Comments:
2022q1 turns losses into profits, and all business segments make concerted efforts. On the revenue side, the company’s revenue in 2021 was 2.007 billion yuan, an increase of 40.70% at the same time. Quarterly, the revenue growth rate of Q1-Q4 in 2021 was 81.51%, 16.02%, 57.48% and 32.08% respectively. The revenue growth rate of Q1 in 2022 was 65% – 75%. Food, environment, medicine, cosmetics, automobile and other sectors achieved rapid growth, and the contribution of military industry and medicine sectors gradually increased; On the profit side, the company realized a net profit attributable to the parent company of 220 million yuan in 2021, an increase of 34.54% at the same time. The growth rate of Q1-Q4 net profit attributable to the parent company was loss, 15.03%, 83.22% and 13.93% respectively. In 2022q1, the loss was reversed, the profit was 4-5 million, the income side increased high and the profitability was improved. In 2021, the gross profit margin was 46.16%, a year-on-year decrease of 2.70pct, and the net profit margin was 10.98%, a decrease of 0.50PCT, mainly related to the change of business structure. In 2021, the material expenditure accounted for 17.34% of the total cost, and the material expenditure cost increased by 150.75%, mainly due to the increase of consumables caused by the high growth of nucleic acid detection business.
The expense rate has improved significantly and the operating efficiency has continued to improve. In 2021, the sales expense rate was 15.73%, down 1.88 PCT at the same time. The refined management continued to advance, and initial results have been achieved. The per capita output value has increased for two consecutive years. The per capita output value reached 275400 yuan in 2021 and 217500 yuan in 2020. We expect there is still room for improvement in the future; The management expense ratio is 10.67%, with a decrease of 0.91 PCT at the same time. With the continuous operation of Shanghai and Wuhan experimental bases and the expansion of income scale in the future, the management expense ratio still has room to decline. Even in 2021, the economy brought by self built bases has been reflected. In 2021, the depreciation and amortization of the company’s management expenses increased by about 5 million year-on-year, and the rent and utilities decreased by about 8 million year-on-year. The financial expense rate was 0.02%, decreased by 0.14 PCT at the same time, and the R & D expense rate was 7.48%, increased by 0.58 PCT at the same time. The R & D investment continued to increase and the competitiveness of the company continued to consolidate.
Actively expand new business areas and continuously consolidate the advantages of comprehensive testing. The inspection and testing track is “long slope and thick snow”. In 2021, China’s inspection and testing scale exceeded 400 billion, with a growth rate of more than 12%. It is one of the fastest growing and most potential inspection and Testing Markets in the world. With economic development and scientific and technological progress, the required inspection categories and new inspection categories continue to increase, and the scale of inspection and testing market is expected to maintain rapid growth in the medium and long term. At present, the company has built four regional headquarters in Beijing, Shanghai, Suzhou and Wuhan, and its comprehensive testing advantages continue to be consolidated. In 2021, the revenue of the health and environmental protection sector was 1.724 billion, with an increase of 45.83% and a gross profit margin of 44.80%, with a decrease of 2.69 PCT. Nucleic acid detection made a certain contribution; The revenue of the commodity quality appraisal sector was 188 million, an increase of 18.35% and the gross profit margin was 59.01%, an increase of 0.94 PCT. The company continues to expand its business sector layout, and the contribution of military industry and cro / cdmo sectors has increased rapidly. It plans to acquire 70% equity of general test and testing to strengthen the layout of electronic and electrical sectors. We believe that the company will actively expand new business areas and new regions through endogenous and M & A, with large long-term growth space.
Profit forecast and investment rating: we expect the company to realize net profit attributable to parent company of 296 million yuan, 406 million yuan and 527 million yuan from 2022 to 2024, with corresponding EPS of 1.86 yuan / share, 2.55 yuan / share and 3.31 yuan / share respectively, and corresponding PE of current stock price of 36 times, 26 times and 20 times respectively. Maintain the “buy” rating.
Risk factors: the risk of new business expansion falling short of expectations, the risk of intensified industry competition, the risk of policy changes, the risk of raw material price fluctuations, etc.
