Company profile: industrial robot "Little Giant", all-round business layout. 1) persist in deep ploughing and careful cultivation, the "little giant" in the robot. The company was engaged in electric vehicle testing business at the beginning of its establishment, and in 2014 the company began to develop the first generation of wheeled intelligent inspection robots. At present, the company has formed a relatively mature independent intellectual property rights and core technology system in the field of industrial robots. In 2020, the company won the title of "Little Giant" specialized by the Ministry of Industry and Information Technology. 2) the product system is complete, and the sea, land and air tunnel is arranged in an all-round way. The company's products can be used in electric power, rail transit, oil and gas chemical industry and other industries, the company has gradually formed a "sea, land, air, tunnel" omni-directional strategic layout, will continue to protect the healthy operation of industrial production equipment and environment. 3) rapid growth in performance and excellent profitability. The company's income grew at a compound rate of 33.3% from 2016 to 2020, and its home net profit grew by 36.3%. In terms of both revenue and profit, the company maintained a stable and rapid growth, with a gross profit margin of 59.8% and a net profit rate of 26.5%. Strong profitability.

Industry analysis: the space potential of the industry is large, and the regional leader is low and stable. 1) the market space is sufficient and the future development can be expected. Based on the number of substations in 2017, assuming a permeability of 24%, the market capacity of outdoor wheeled intelligent inspection robots is about 4.38 billion yuan, and the market capacity of indoor inspection robots is about 2.927 billion yuan. At present, the provinces with large demand for intelligent inspection robots are mainly in economically developed areas, as substations will gradually realize intelligence and unmanned duty. Coupled with the increased demand for new UHV and substation scenarios, the overall market scale of intelligent inspection robots is expected in the future. 2) the regional characteristics are remarkable and the competition pattern is stable. According to the current market participants, at present, it is mainly 100 million Jiahe, Lang Chi Xinchuang, National Network Intelligence, Zhejiang Guozi, Shen Hao Science and Technology and other enterprises. from the point of view of volume, the three companies of State Network Intelligence, Yijiahe and Shen Hao Technology have formed large-scale sales. The corresponding income proportion of the three leading companies in the province all account for a large proportion, and each enterprise basically ranks first in the market share of the province. Therefore, the regional characteristics of intelligent inspection robot business are more obvious.

Company logic: the main products continue to upgrade, the development of new products to create highlights. 1) the products are constantly upgraded and the production capacity is deployed flexibly.

The company's inspection robot only takes 1-2 years from research and development to mass production cycle, the product update speed is fast, and it can respond to the market demand quickly. In the case of substantial changes in the order structure, the company can flexibly deploy the production capacity of the production line in order to deliver products in time to meet customer needs. 2) to enter the rail transportation industry, it has the advantage of first-mover. The company began to lay out the rail transit industry in 2018, and the company has developed a rail transit line inspection robot with various functions, and the trial operation effect of rail transit products is quantified. This year, it will obtain small batch orders and have a first-mover advantage in the rail transit industry. 3) accelerate the expansion outside the province, and the after-sales service is efficient. In 2020, the proportion of the company's business income outside Zhejiang Province was 40.19%, the proportion of income outside the province increased significantly, and the company's expansion outside the province had a remarkable effect. The company has a sound after-sales service system and a sound feedback mechanism. 12 hours in the province and 48 hours outside the province can arrive at the scene to solve the problem. 4) attach importance to R & D investment and achieve fruitful technical results. At the end of 2020, the company's R & D personnel accounted for 36.8%, the R & D expense rate was 11.5%, and R & D expenses continued to grow at a high speed. The company continues to develop new products in the fields of power system, rail transit, oil and gas chemical industry and public health, and the product system is becoming more and more perfect.

Profit forecast and investment advice: we expect the company to achieve operating income of 8.2,11.3 and 1.6 billion yuan respectively in 2021-2023, an increase of 33.7%, 37.6% and 41.7% respectively over the same period last year, and realize net profit of 2.2,3.1 and 420 million yuan respectively, up 37.9%, 36.9% and 37.4% respectively over the same period last year. The corresponding EPS is 1.52,2.08,2.86 and the corresponding PE is 25.8X, 18.8X and 13.7X respectively. The stable power business + rapid outbreak of rail transit business is expected to bring sustained and rapid growth to the company's performance, covering it for the first time and giving it a "buy" rating.

Risk hints: the risk that the bidding progress of State Grid is not up to expectation, the risk of intensified market competition, the risk that the expansion of rail transit industry is lower than expected, the risk that accounts receivable can not be repaid on time, the risk that public information lags behind or is not updated in a timely manner.