Incident: The company released its 2021 semi-annual report. In 2021, H1 achieved operating income of 351 million, +57.5% year-on-year; net profit of 61 million yuan, +84.4% year-on-year. On a quarterly basis, Q2 2021 achieved revenue of 229 million, +53.9% year on year, +89.0% month on month; realized net profit of 41 million yuan, +13.9% year on year, and +108.9% month on month.
Comment: High performance growth, exceeding market expectations. The company's 2021 H1 revenue and performance both increased significantly year-on-year, mainly due to the low base affected by the epidemic last year, and at the same time benefiting from the rapid release of orders due to the expansion of production by downstream power lithium battery manufacturers. The production capacity utilization rates of the company's inspection system and automation equipment in the first half of the year were 116.1% and 110.4% respectively, and they were all overloaded and operated. The company's three rate in 2020 reached 18.6%. With the increase in size and the company's active fee control and efficiency, the 2021H1 three rate has been reduced to 15.1%, and the rate decline is expected to continue.
Consumption and power are fully covered, and the customer structure is high quality. The company is a leading supplier of lithium battery testing equipment and systems in China. The company's customers are of high quality. By 2020, the three major customers were CATL (accounting for 43%), ATL, and BYD. In July of this year, the company regularly issued order announcements. CATL added a total of 4.2 million new orders this year, accounting for 74% of total revenue in 2020, reaching 185% of CATL's total revenue (220 million) last year. The company has benefited from a significant increase in production from core customers. Currently, orders are full, supporting the company's continuous growth in performance throughout the year.
Expand testing services with testing capabilities as the core, and further expand growth space. The company achieved inspection service revenue of 33 million yuan in 2021 H1, with a gross margin of 38.8%. Fujian Nebula Testing, a subsidiary of the company, successfully obtained the authoritative national CNAS certification. At the same time, the company set up Ningde Nebula Inspection to provide close, fast and efficient inspection services for CATL for major customers.
The energy storage policy has been implemented, and the industry is poised to flourish. The company has made thorough preparations in business fields such as energy storage and charging piles, launched products such as Nebula series energy storage converters (PCS) and Nebula series charging piles, and actively cooperated with downstream power grids and energy companies, including the subsidiary Era Nebula (a joint venture with CATL), to carry out small-scale pilot use. At the end of July this year, energy storage policies were implemented one after another, the industry was poised to flourish, and the company's energy storage business space was vast.
Profit forecast and rating: We expect the company to achieve revenue of 924/15.73/2,058 million yuan in 2021-2023, respectively, and net profit of 120/2.08/317 million yuan, corresponding PE of 75.27/43.52/28.60 times. Maintain buy ratings.
Risk warning: NEV sales fall short of expectations, order execution falls short of expectations, etc.