Introduction to this report:
The transformation of ultra-low emissions in the non-electricity industry is accelerating, compounded by the “three 80 million installed capacity” changes in thermal power, and the company's environmental monitoring business is expected to continue to soar. The shareholding ratio of overseas mass spectrometry subsidiaries has increased, and the high-barrier analytical instrument business is expected to revalue the company's value.
Key points of investment:
Maintain an “increase in holdings” rating. We maintain our forecast net profit for 2022-2023 and an increase of 2024 at 377, 462, and 575 million yuan respectively, and the corresponding EPS is 0.60, 0.73, and 0.91 yuan respectively. The non-electricity industry is accelerating the transformation of ultra-low emissions. Combined with industry changes such as the “three reforms linked” and “three 80 million installations” of thermal power, the demand for monitoring pollution sources has been further released, and the company's environmental monitoring business is expected to grow steadily. At the same time, the company's high-precision analytical instrument technology has been recognized, and high business barriers are expected to create opportunities for value revaluation. Maintain the target price of 11.34 yuan and maintain the “increase in holdings” rating.
Environmental monitoring and operation and maintenance services have been growing steadily, and the performance is generally in line with expectations. 1) In 2022, the company achieved operating income of 1,555 million yuan, an increase of 9% over the previous year; attributable net profit of 284 million yuan, an increase of 28% over the previous year; net profit after deducting unattributed net profit of 234 million yuan, an increase of 38% over the previous year. 2) In 2022, the company's environmental monitoring business and supporting system transformation and operation and maintenance services achieved sales revenue of 861 million yuan and 319 million yuan respectively, up 20% and 39% year-on-year respectively, driving steady growth in the company's revenue.
Increase the shareholding ratio of overseas mass spectrometer subsidiaries and cooperate with the Chinese Academy of Metrology to develop carbon measurement business. 1) The company expands its product line of high-end analytical instruments for time-of-flight mass spectrometry and gas chromatography through overseas mergers and acquisitions. In 2022, the company further increased Kore's shareholding ratio for overseas mass spectrometer R&D and sales to 73.87%. 2) On the basis of participating in carbon emission monitoring testing sites, the company set up a joint venture with the Chinese Academy of Metrology, which is expected to combine national and international standards to expand carbon measurement and monitoring business.
The second phase of the employee equity plan has been extended, and the incentive mechanism continues to strengthen. Compared with the 2021 employee stock ownership plan, the company's first and third employee stock ownership plans motivate a wider range of employees. The duration of the first and third employee plans was extended until April 2025, and the incentive system continued to strengthen.
Risk warning: the risk of technology iteration, emission reduction transformation falling short of expectations, and the risk of accounts receivable recovery.