Event: The company released its 2021 mid-year report.
21H1: The company achieved revenue of 165 million, yoy +5.15%; net profit of 37 million yuan, yoy +38.52%; net profit of 34 million, yoy +31.48% after deducting non-attributable net profit. The gross sales margin was 41.46%, yoy+4.92pct; the net sales profit margin was 22.36%, yoy+5.39pct, mainly due to increased sales of high-end products and technological innovation to improve self-control. Cash flow from operating activities was $08 billion, mainly due to the fact that some new contracts did not stipulate advance payments from the company, increases in various taxes and fees, and increases in administrative expenses such as consulting service fees during the IPO period.
21Q2: The company achieved revenue of 87 million yuan, -34.58% year on year, +11.65% month on month; net return profit of 119 million yuan, -28.77% year on year, +9.54% month on month; net profit of non-attributable net profit of 0.17 million, minus 35.91% year on year, +0% month on month. The gross profit margin on sales was 40.56%, +4.89pct; the net sales margin was 22.16%, +1.81 pct.
Revenue split by category: 1) By product: 2021H1 intelligent test equipment: 137 million, +10.15%; test and verification services, 0.17 million, -34%; spare parts and maintenance, 111 million, +63.94%. 2) According to the downstream sector: 2021H1 new energy vehicles, 84 million, +18.46%; fuel vehicles, 47 million, -6.36%; ships, 118 million, -38.22%; aviation, 0.09 million, +163.86%; construction machinery and others, 05 billion, +225.47%.
The overall rate increased steadily during the period: it was mainly due to the company's increased investment to help the company grow: in the first half of the year, the company's sales expense rate, management cost rate, R&D expense rate, and financial expense ratio were 4.39%, 5.86%, 6.07%, and -0.35%, respectively, +0.84 pct, +1.32 pct, +0.33 pct, and -0.21 pct, respectively. The sharp increase in management expenses was mainly due to the increase in consulting expenses during the IPO period.
The downstream business is growing rapidly, and the fields of hydraulic dynamometers and automobile inspection go hand in hand.
1) Aviation: The company has a first-mover advantage, and localized substitution is accelerating. As the only domestic supplier of industrial engine testing equipment in China Aviation Development South, the company has broad potential for growth. As of the 2021 interim report, the total amount of orders placed by the company's aviation was 97.1914 million yuan. According to statistics, the total bid amount won by the company in the aviation sector from January to June '21 reached 44,8952 million yuan, respectively, for Shenyang Engine Research Institute, 3.98 million/18.396 million/10.688 million; Southern Industrial Co., Ltd. 3.976 million/7.8536 million (delivery expected in September). In 2020, aeronautical hydraulic dynamometer revenue was 18.57 million.
2) New energy & traditional vehicles: The products are in a leading position in the industry, and most of the customers are leaders at home and abroad. With strong demand for testing new energy vehicles, performance is expected to gradually be released.
Profit forecast: We expect the company's net profit for 21-23 to be 1.03/131/169 million, corresponding PE to be 46/36/28X respectively, and the estimated target price is 103.04 yuan, maintaining the purchase rating!
Risk warning: risk of fluctuation in the automobile industry, risk of fluctuation in raw material supply, risk of market competition, risk of long project acceptance cycle, etc.