\u3000\u3000 Centre Testing International Group Co.Ltd(300012) (300012)
The performance is in line with expectations, and the net profit will increase by 29% in 2021; Deduction of non net profit growth of 35%
Company announcement: it is expected to realize a net profit of 730 ~ 760 million yuan in 2021, with a year-on-year increase of 26% ~ 32%; The non recurring net profit deducted was 630 ~ 660 million yuan (the non recurring profit and loss in 2021 was about 100 million yuan, with a year-on-year increase of 2%), with a year-on-year increase of 31% ~ 38%; The performance is in line with expectations.
Q4 achieved a net profit of 180 ~ 210 million yuan in a single quarter, with a year-on-year increase of – 2% ~ 15%; The net profit was 190 million yuan, a year-on-year increase of 7%. We estimate that the net interest rate of Q4 in a single quarter is about 13.8%, down 1.3pct year-on-year
The growth of traditional business is stable, focusing on medicine, building materials and rail transit. It is expected to start in 2022
Traditional business: the environmental sector is still in the stage of reshuffle due to intensified competition and regulatory inspection; In the food sector, with the implementation of the company’s supply chain management strategy and the increase in the proportion of orders of private enterprises, it is expected that the revenue in 2021 is expected to exceed that in the environment sector; The trade sector and consumption sector rebounded with the gradual control of the epidemic, among which the automobile sector recovered significantly. The company will increase its layout in the field of new energy vehicles and automotive electronics in the future.
Key business layout: the medical sector is expected to grow rapidly in the future with the expansion of laboratory area; Due to the low base and smooth business expansion of the company, the field of building materials and rail transit is expected to grow rapidly in the future.
Endogenous epitaxial two wheel drive accelerates, overweight the layout of key strategic areas, and promote the process of internationalization
Extension M & A: acquire 40% equity of HaoTu and open up the one-stop service capability of the whole industrial chain in the field of daily chemical products and food; Acquire 20% equity of Jingguo confidence and quickly enter the field of data center testing; Acquire 100% equity of Magan and enhance the technology and hardware of the company’s automotive interior testing; It is proposed to acquire 90% equity of Germany Yima to form synergy with China’s automobile testing business.
Endogenous drive: there are about 150 laboratories and more than 260 service networks worldwide. In the first half of the year, seven new subsidiaries were established, five of which were medical laboratories in Tianjin, Qingdao, Yunnan, Beijing and Suzhou.
The Chinese market of the testing industry exceeds 310 billion yuan, and the market share of Centre Testing International Group Co.Ltd(300012) China has great room to improve
The industry has a large market space. In 2019, the scale of the global inspection, testing and certification market exceeded 1.7 trillion yuan, and the Chinese market exceeded 310 billion yuan; The Chinese market is expected to maintain a growth rate of more than 10% in the next 10 years, higher than the GDP growth rate in the same period. In 2020, Centre Testing International Group Co.Ltd(300012) China’s market share was only about 1%, and the global Cr5 was about 10%. Compared with the average market share of Cr5 in the world, the company still has at least twice the room for improvement.
Profit forecast and valuation
It is estimated that the revenue from 2021 to 2023 will be 4.4/53/6.3 billion yuan, with a year-on-year increase of 22% / 21% / 20%; The net profit attributable to the parent company was 740 / 940 / 1.15 billion yuan, with a year-on-year increase of 29% / 27% / 22%; The PE corresponding to the current market value is 48 / 38 / 31. Long term optimistic about the company, under the leadership of excellent management, the market share continues to improve and maintain the “buy” rating.
Risk tip: vicious competition in downstream segments intensifies; Management capacity challenges brought by scale expansion;
