\u3000\u3000 China Automotive Engineering Research Institute Co.Ltd(601965) (601965)
Event: China Automotive Engineering Research Institute Co.Ltd(601965) released the performance express, and the revenue in 2021 was 3.83 billion yuan, yoy 12.1%; The attributable net profit was 690 million yuan, yoy 23.9%; The net profit deducted from non profits was 570 million yuan, yoy 15.9%.
Comments:
New energy, intelligent Internet connection and other innovative businesses have brought new increment, and the income from asset disposal has thickened the net profit. In 2021, the company’s revenue increased by 12.1% year-on-year. Under the background of negative year-on-year growth of manufacturing equipment business (mainly dragged down by special vehicles, and the sales volume of heavy trucks in 2021 was – 13.8% year-on-year), the company maintained rapid growth, mainly benefiting from the continuous improvement of the market share of traditional businesses and the breakthrough of innovative businesses such as new energy and intelligent Internet connection, which maintained the rapid growth of technical service revenue, 2021q1-q3 technical service revenue is 1.44 billion yuan, yoy 29.2%. In 2021, the attributable net profit increased by 23.9% year-on-year and the increment was 133 million yuan, of which the income from asset disposal was 94 million yuan, contributing 71.0% of the increment.
The gross profit margin decreased and the asset impairment loss dragged down the profit. The attributable net profit YoY in Q4 was – 10.1%. In a single quarter, Q4’s revenue was 1.24 billion yuan, yoy 20.8%; During the period, the cost was 219 million yuan, yoy 10.3%, and the cost control was stable; The attributable net profit was 200 million yuan, yoy 10.1%. The performance of the profit side was far lower than that of the income side. The possible reasons were: 1) affected by the rise in the price of raw materials and the increase in depreciation, the gross profit margin of 21q4 was 36.4%, down 2.5pct from the same period of last year; 2) the investment income, asset impairment loss and credit impairment loss resulted in a total pre tax loss of 33 million yuan, a loss of 28 million yuan more than that of the same period of last year, 3) The profit and loss of minority shareholders increased by 7.181 million yuan over the same period of last year.
The target of vehicle test and evaluation is scarce, and the growth of new energy and intelligent Internet service can be expected. The company is a third-party vehicle testing and evaluation leader with mandatory testing qualification. Its traditional business is expected to benefit from the increase of market share, as well as the implementation of policies such as the disclosure of environmental protection information of six countries for parallel imported vehicles, “special treatment of large ton and small standard”, and the fourth stage standard of non road mobile machinery. In the innovative business, the penetration of new energy vehicles is accelerated, and the penetration rate is as high as 19.1% in December 2021; In terms of intelligent Internet service, it is estimated that L2 ADAS penetration rate will be about 18% in 2021, entering a period of rapid popularization. The company laid out new energy and intelligent Internet service earlier. With the introduction of new energy models and the gradual implementation of intelligent vehicle policies and standards, the innovative business income is expected to enter a rapid growth stage.
Investment suggestion: we estimate that the revenue from 2021 to 2023 will be 3.81 billion yuan, 4.38 billion yuan and 4.95 billion yuan; The attributable net profits were 690 million yuan, 820 million yuan and 950 million yuan respectively, with a year-on-year increase of 23.9%, 17.9% and 16.2%; From 2021 to 2023, EPS was 0.70 yuan, 0.83 yuan and 0.96 yuan respectively, and corresponding PE was 24.5 times, 20.8 times and 17.9 times respectively. Considering the scarcity of the company and the growth potential of innovative business, it was rated as “prudent recommendation”.
Risk tips: 1) the prosperity of the automobile industry is lower than expected; 2) Depreciation increased significantly, and the gross profit margin decreased more than expected; 3) Increased competition leads to increased cost rate; 4) Professional car business fell sharply, dragging down the company’s profits; 5) The progress of innovative business is less than expected.
