Main points of investment:
The company's 2016 annual report revealed. In 2016, the company achieved operating income of 430 million yuan, an increase of 33.88 percent over the same period last year, and the net profit belonging to shareholders of listed companies was 55.74 million yuan, an increase of 22.68 percent over the same period last year. The dividend plan is 0.25 yuan for every 10 shares.
The main business grew steadily, the gross profit margin decreased slightly, and the sales expenses increased. In 2016, Tianrui Instruments achieved an operating income of 430 million yuan, an increase of 33.88% over the same period last year. Of this total, the income of energy dispersion XRF was 172 million yuan, up 9.59% over the same period last year; the revenue of wavelength dispersion XRF was 10.78 million yuan, up 6.31% from the same period last year; the income from other spectrometers was 12.85 million yuan, down 32.68% from the same period last year; the income from other products was 120 million yuan, up 96.44% from the same period last year; and the income from environmental protection engineering and operation was 109 million yuan, up 54.20% from the same period last year. In 2016, the company's comprehensive gross profit margin was 49.79%, down 5.73 percentage points from the same period last year. Of this total, the gross profit margin of energy dispersive XRF was 65.14%, up 0.09% from the same period last year; and the gross profit margin of environmental protection projects and operations was 33.07%, down 8.82% from the same period last year. The company's sales expenses increased by 21.98%, management expenses increased by 7.74%, and financial expenses increased by 18.38%. The rate of sales expenses and management expenses is reduced, and the rate of financial expenses is increased. In 2016, the company's investment income was 6.85 million yuan, an increase of 96.5% over the same period last year, mainly due to income from wealth management products. Non-operating income and expenditure was 22.55 million yuan, an increase of 14.34% over the same period last year, mainly due to the increase in government subsidies and embedded software VAT rebates.
What to watch: the main focus in the future is to serve as the leader of domestic X-ray testing instruments and to create an analysis and testing industry chain + environmental protection health platform. Excellent analytical instrument technology: the company is a leader in the domestic chemical analysis industry, specializing in the R & D, production, sales and related technical services of high-end analytical instruments and application software based on spectrometer, chromatograph and mass spectrometer. The products are mainly used in many fields, such as environmental protection and safety, industrial production quality control, mineral and resources, commodity inspection, quality inspection, human trace element inspection and so on. The company pays attention to research and development, accounting for 8.43% of the investment in R & D in 2016, which is the leader in the domestic X-ray testing equipment industry. Analysis and testing industry chain + Environmental Protection Great Health: in 2015, Tianrui Instruments acquired environmental protection, and later changed its name to Tianrui Environment, and entered the field of comprehensive environmental management. In 2016, the company acquired 100% equity in Shanghai Bessie Biotechnology Co., Ltd., acquired 40% equity in Jiangsu National Test and testing Technology Co., Ltd., and increased its capital to enter the field of real-time in vitro diagnosis and third-party testing services. at the same time, it has a large-scale comprehensive chemical, environmental, public health, consumer goods and other standard testing laboratories.
Profit forecast and valuation. It is estimated that the company's net profits belonging to the parent company in 2017 and 2018 will be 1.02 yuan and 135 million yuan respectively, and the corresponding EPS will be 0.22,0.29 yuan respectively. Compared with the valuation of companies in the same industry, as well as the layout of the company's products in the field of health and environmental governance, the company will be given a buy rating of 55 times PE in 2017, corresponding to the target price of 12.1yuan.
Risk hint. (1) Tianrui Environmental performance commitment falls short of expectations. (2) the slow progress of environmental monitoring policy leads to the demand growth rate of related products of the company falling short of expectations. (3) shortage or loss of core technical personnel. (4) the competition in the industry intensifies and the gross profit margin decreases.