The company is the main provider of overall solutions in the field of domestic motor vehicle testing, from equipment to the large market of operational services. In the short term, the industry will experience a cold winter in 2021, but in the medium to long term, we think the company's business has reached an inflection point.
Core viewpoints
High asset quality, short-term overfall: the company, as the leader of domestic vehicle inspection equipment, has continuously cut into the motor vehicle testing service industry since 18 years. Affected by policy changes, corporate profits fell sharply in 2021. However, the company's 21Q3 gross profit margin of 48% is still higher than the historical level. At the end of September 21, the company's monetary cash and transactional financial assets reached 1.57 billion yuan, and the asset-liability ratio was 18%. On the whole, it has high asset quality.
The car inspection service will send away the cold winter and usher in the spring. Although the industry is in a cold winter in 2021, but from the law of development of environmental protection and safety, the requirements of vehicle testing will continue to improve, and the industry will continue to move forward. Compared with overseas developed countries, the density of inspection stations in China is still low, the frequency of vehicle inspection is still low, the testing content still needs to be enriched, and there is still much room for improvement in the scale of the industry in the future.
With a large market for testing services, the industry is expected to give birth to giants. According to the model, we think that with the increase of vehicle ownership, the testing service market is expected to reach 70 billion yuan in 2025, but the industry is still scattered and chaotic. On the other hand, there are regional giants in overseas mature markets, such as Decai in Europe. We believe that with the maturity of the domestic market, the vehicle inspection market will also produce leading enterprises with a higher share.
To carry out new energy business and open up new market space: the company has won the bid for public charging pile project to fully demonstrate the combined strength of software and hardware. At the same time, the company also reached strategic cooperation with time Electric Service in the same period, and will explore cooperation opportunities in the fields of power exchange and related business space sharing, operation and maintenance of power exchange station, promotion and sales of power exchange vehicles, R & D and manufacturing of power exchange equipment, etc. We believe that the cooperation between Anche and Times Electric Service is expected to achieve a win-win effect, while promoting the power exchange mode, to achieve the flow integration and sustained growth of both sides.
We forecast that the company's earnings per share from 2021 to 2023 will be 0.05,0.70,0.92 yuan respectively. Based on the consistent expectation of Chaoyang, the comparable company will adjust its average price-to-earnings ratio of about 33xPE in 2022. We will give car Safety Test 2022 33xPE with a target price of 23.10 yuan and give a buy rating for the first time.
Risk hint
The adverse changes in industry policy, the expansion of testing stations are not as expected, the operation and management are not as expected, the operation of replacement stations is not as expected, the sustainability of charging pile projects is not as expected, and the changes in hypothetical conditions such as testing times and unit price affect the calculation results.
