Incident: The company released its 2021 mid-year report, achieving revenue of 1,035 million yuan (+25.93%) and net profit of 188 million yuan (+31.23%) to the mother.
Core views
The growth of aviation military products exceeded expectations, the sensor control business achieved rapid growth, and the vehicle inspection business declined somewhat due to the impact of the new inspection policy. Looking at the Q2 quarter alone, the company achieved revenue of 619 million yuan (+24.13%) and net profit of 147 million yuan (+34.86%). The growth rate increased significantly from Q1. Looking at different businesses, 1) Aviation military revenue was 248 million yuan (+64.10%), of which Hanzhong 101 contributed 156 million yuan (+47.25%); sensor control revenue was 534 million yuan (+41.31%), of which Shanghai Yaohua contributed 142 million yuan (+23.16%); intelligent transportation business revenue was 218 million yuan (-18.66%). The decline in sales was mainly due to the release of policy dividends from industry standards upgrades and the temporary impact of the entry into force of the new vehicle inspection policy.
Expense control was optimized, and inventory increased by 41.63% year-on-year. Although gross margin fell 2.53 pct to 37.94% during the reporting period due to changes in product structure, the company's net interest rate still achieved an increase of 0.83 pct to 18.58%. This is the fourth year in a row that the company has achieved an increase in net interest rate. The main reason for this is good control of the cost rate during the period. The company's expense rate in the first half of the year was 17.57%, a year-on-year decrease of 2.77 pct. Among them, the sales expenses ratio was 5.29% (-1.98 pct) and the R&D expenses rate was 4.73% (-1.04 pct). The company's inventory at the end of the period was 615 million yuan, an increase of 41.63% over the previous year, indicating that the company had sufficient production and inventory.
Benchmark METTLER TOLEDO and build a world-class intelligent measurement and control platform-based enterprise. As a leading domestic mechanical sensor company that has mastered the core technology of strain gauges, the company has continued to promote product transformation and upgrading in recent years, and has gradually completed the expansion of horizontal and multi-field and vertical system integration. Benchmarking METTLER TOLEDO (MTD.N), the company is completing its transformation from a simple device supplier to an intelligent measurement and control platform-based enterprise. Currently, driven by booming demand such as aviation and military goods, consumer electronics, and smart logistics, the company has entered an accelerated growth channel.
Financial forecasting and investment advice
Considering the temporary pressure on the vehicle inspection business, aviation products, consumer electronics, and smart logistics showed high growth. The earnings per share for 21-23 were adjusted to 0.59, 0.77, 0.99 yuan (originally 0.60, 0.76, 0.95 yuan), and based on the 43-fold valuation of comparable companies in 21, the target price was 25.37, maintaining the “buy” rating.
Risk warning
The improvement in operating efficiency fell short of expectations; demand for vehicle inspection equipment fell short of expectations