occurrences
The company released its 2021 mid-year report. During the reporting period, the company achieved operating income of 251 million yuan, an increase of 22.86% over the previous year, and the net profit of the mother was 42 million yuan, a decrease of 6.82% over the previous year.
Brief review
The first half of the year is under pressure for the time being, so I'm optimistic about the bid recovery in the second half of the year
2021H1 achieved operating income of 251 million yuan, an increase of 22.86% over the previous year, and achieved net profit of 42 million yuan to its mother, a decrease of 6.82% over the previous year. The growth rate of the company's net profit was less than revenue mainly due to the fact that the first half of the year of the power industry was usually a low season. The company's profit in the first half of the year was relatively small, and expenses increased due to increased depreciation and employee remuneration due to the completion and consolidation of the Shen Hao Building infrastructure project in 2020.
In terms of profitability, 2021H1's gross margin was 56.00%, a year-on-year decrease of 0.89 pct. The increase in raw material prices did not have a significant impact on the company's profitability. The company's net interest rate to the mother was 16.70%, down 5.32 pct from the previous year.
The company's expenses rate increased by 6.01 pct over the same period last year. Among them, the sales expense ratio, management expense ratio, and financial expense ratio were 12.38%, 13.15%, and -0.96% respectively, up 1.11 pct, 4.39 pct, and down 1.08 pct respectively over the previous year. The R&D expenditure rate was 15.36%, an increase of 1.60 pct over the previous year.
Looking ahead to September and December, power grid bidding will usher in a peak season. With the delivery of the company's orders and the confirmation of revenue, the company's performance will experience significant growth.
The penetration of intelligent power monitoring equipment will accelerate, and the company will expand the country based on Zhejiang. In the intelligent transformation of power grids, the traditional manual inspection model for power grids has high safety risks, low efficiency, poor quality, and high costs. It will be gradually replaced, and the penetration rate of intelligent power monitoring equipment will continue to increase. The company is deeply involved in the field of smart grids. It has two major business segments: intelligent power monitoring and control equipment and intelligent inspection robots. They jointly serve intelligent power monitoring to achieve full coverage of fixed and mobile terminals, and product demand continues to grow.
Second, the company's intelligent robots have achieved a leap from “inspection” to “operation”, and functional upgrades will bring new performance increases. Furthermore, the company's products rely on successful application experience in Zhejiang Province to accelerate the expansion of regions outside the province. In 2020, business outside the province made impressive progress, and the share of revenue outside the province increased from 9.06% to 40.19%. The continued expansion of regional business outside the province is worth looking forward to.
The rail transit industry is a blue ocean of intelligent inspection robots, contributing to new growth points. The scale of domestic urban rail transit and railway operations continues to grow, and demand for operation and maintenance is being generated simultaneously. Currently, the rail transit industry's maintenance model relies too much on manpower, and quality cannot be guaranteed. In recent years, national policies have actively promoted intelligent rail transit operation and maintenance.
According to our estimates, the potential market space for rail inspection robots and train underbody inspection robots is at the level of 10 billion dollars.
The company is expanding rail inspection robots and train underbody inspection robots. Its products have advantages in terms of technology and cost effectiveness. Currently, the product has received good feedback from some subway trials. It is expected that it will be released in the future and will become a new growth point for the company.
Investment suggestions: It is estimated that in 2021-2023, the company will achieve operating income of 855, 11.72 and 1,588 billion yuan respectively, with a year-on-year ratio of +39.73%, +37.20%, and +35.43% respectively; the company's net profit returned to the mother was 2.18, 2.96, and 404 million yuan respectively, +34.38%, +35.87%, +36.45% year-on-year; corresponding PE was 28.71, 21.13 and 15.49 times, respectively, maintaining the “buy” rating.
Risk warning: risk of dependence on the power industry and power grid companies; risk of seasonal fluctuations in main business income; risk of concentrated business areas.
