\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 87 Pony Testing International Group Co.Ltd(300887) )
Event: the company disclosed its annual report on April 22, 2022. In 2021, the company realized an operating revenue of 2.007 billion yuan, a year-on-year increase of + 40.70%; The net profit attributable to the parent company was 220 million yuan, a year-on-year increase of + 34.54%, slightly exceeding the previous performance express of 218 million yuan; The net profit deducted from non parent company was 190 million yuan, a year-on-year increase of + 38.87%.
Key investment points
The performance slightly exceeded expectations, benefiting from the gradual growth of production capacity
In 2021, the company realized a revenue of 2.007 billion yuan, a year-on-year increase of + 40.70%; The net profit attributable to the parent company was 220 million yuan, a year-on-year increase of + 34.54%. From 2016 to 2021, CAGR was 20% and 17% respectively, benefiting from the easing of production capacity bottleneck after listing and the accelerated growth of the company's performance. At the end of 2021, the company's fixed assets were 941 million yuan, with a year-on-year increase of + 111% and a month on month increase of + 18% compared with the end of Q3 in 2021, mainly due to the transfer of fixed assets and the purchase of a large number of new equipment in Shanghai and Wuhan experimental bases.
From the perspective of the company's branch business in 2021: (1) life science and health and environmental protection: the company achieved a revenue of 1.72 billion yuan, a year-on-year increase of + 45.8%, of which ① food and environment sector: traditional business, benefiting from the easing of capacity bottlenecks; ② Medical testing: the demand for nucleic acid testing has increased; ③ Cro / cdmo: emerging business, with the rapid growth of laboratory capacity. (2) Commodity quality appraisal: the revenue was 190 million yuan, a year-on-year increase of + 18.4%. (3) Security: the revenue was 45 million yuan, up + 16.5% year-on-year.
(4) electronics and safety regulations: the revenue was 41 million yuan, a year-on-year increase of + 2.0%.
The cost control ability is optimized, and the profit margin has great potential
In 2021, the company's comprehensive gross profit margin was 46.16%, a year-on-year increase of -2.70pct; The net profit margin attributable to the parent company was 10.98%, with a year-on-year increase of -0.50pct; The expense rate during the period was 33.9%, with a year-on-year rate of -2.4pct, of which the management / R & D / sales / financial expense rates were 10.67% / 7.47% / 15.73% / 0.02% respectively, with a year-on-year rate of -0.9pct / + 0.6pct / - 1.9pct / - 0.1pct, and the cost control ability was optimized. In 2021, the company's per capita income was 275000 yuan, a year-on-year increase of + 26.6%. With the acceleration of the company's performance growth and the slowdown of employee growth and capital expenditure, the company's per capita output value and net interest rate are expected to increase steadily.
The third-party detection passes through cattle and bears, and the domestic leader is preferred
The third-party detection has a fast and stable growth, passing through cattle and bears. In 2020, the scale of China's third-party testing market was 191.8 billion yuan, a year-on-year increase of + 13%, and the CAGR was 19% from 2013 to 2020. The growth rate of the industry was more than twice that of GDP. In 2020, the share of Pony Testing International Group Co.Ltd(300887) China is only 0.74%, and the leading share has enough room to improve. Bull stocks are frequently detected at the golden track. Overseas detection leaders SGS, Eurofins, Intertek and bv have outperformed the market for a long time. The valuation center was 30 times from 2011 to 2021. Compared with the single digit growth rate of foreign-funded leaders, domestic leaders should have a premium based on excellent growth.
Optimistic about the performance growth rate of 30% in the next three years and welcome the opportunity
We are optimistic about the CAGR of the company's net profit from 2021 to 2024, which is about 30%, significantly faster than the CAGR of the company's net profit from 2016 to 2020, and its growth ranks in the forefront of the industry. It is expected to welcome double-click opportunities: ① laboratory capacity expansion, elimination of factors that suppress performance growth in the early stage, and capacity climbing of large laboratories such as Shanghai and Wuhan. ② Opportunities for fast-growing segments; ③ M & a performance; ④ The growth rate of fixed costs such as employees and depreciation slowed down, and the profitability increased.
Profit forecast and investment rating: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 289 (maintained) / 3.78 (original value of 373) / 488 million, corresponding to 36.45 / 27.86 / 21.61 times of PE, maintaining the "overweight" rating.
Risk warning: the epidemic situation repeatedly affects the normal operation; Macroeconomic and policy changes; The commissioning process of the laboratory is not as expected; The synergy effect after M & A is less than expected; Brand and credibility are adversely affected
