Main points of investment
Event: the company issued a performance forecast for 2017, realizing a net profit of 40.1301 million yuan to 45.6024 million yuan attributable to shareholders of listed companies from January to June, an increase of 10% 25% over the same period last year, of which non-operating profit and loss was about 9.5 million yuan, a decrease of about 43% over the same period last year.
The company is the leader of XRF equipment with profound technology accumulation. The company is the leader of XRF equipment, and has the most complete range of domestic chemical testing equipment, product applications include environmental protection, food safety, industrial testing and so on.
The field of food security is expected to enter the harvest period, bringing significant performance flexibility. The State Grain Administration issued a notice on the implementation of the "High quality Grain Project" and plans to invest 25 billion yuan in 2017-2019, from action demonstration counties and demonstration enterprises to food security inspection system, and then to the comprehensive construction of grain post-natal service system. The annual demand for new equipment is about 2.5 billion yuan, which is expected to bring a new round of opportunities for the company's traditional main business.
Epitaxial mergers and acquisitions strengthen the layout of environmental protection, food safety and medical areas, profit and contribute to performance growth.
The company has acquired four subsidiaries in cash, and its exam preparation performance reached 63.84 million yuan and 84.05 million yuan in 17 and 18 respectively. Through epitaxial mergers and acquisitions, the company has moved from testing equipment to downstream environmental protection engineering and medical third-party testing, into fast-growing industries such as VOCs online monitoring and POCT in vitro diagnosis, and at the same time driving the sales of its own testing equipment, the company will enter a high-speed growth channel in 2017.
Valuation and rating: optimistic about the medium-and long-term growth trend of the inspection and testing industry, "high-quality food project" is expected to bring new opportunities for the company's traditional main business. It is estimated that the company's EPS from 2017 to 2019 will be 0.26 EPS 0.33 won 0.43, respectively, and the corresponding PE will be given an "overweight" rating to 31x/25x/19x.
Risk hint: the promotion of environmental protection and food safety policies is lower than expected.