Main points of investment:
Steady growth in revenue and net profit: the company achieved revenue of 321 million yuan in 2019, an increase of 19.36% over the same period last year; net profit of 124 million yuan, an increase of 30.22% over the same period last year; net cash flow from operating activities was 78.34 million yuan, an increase of 902% over the same period last year; sales gross profit margin was 61.36%, an increase of 0.29pct over the same period last year; the R & D expenditure rate was 6.05%, an increase of 0.58pct over the same period last year The rate of sales expenses and management expenses decreased slightly compared with the same period last year. Of this total, the revenue of the rail transit signal control system business reached 235 million yuan, an increase of 19.71 percent over the same period last year, and the gross profit margin decreased by 1.35 pct over the same period last year; the revenue of lightning protection and protection business reached 85.92 million yuan, an increase of 18.45 percent over the same period last year, and the gross profit margin increased by 4.82pct over the same period last year. At present, the company has established a relatively stable cooperative relationship with China Railway Group, various railway bureaus, local railway companies and local rail transit companies and major system integrators in the urban rail transit industry. With the increase of the company's projects and customer resources, the upgrading demand for the original project continues to increase, which is conducive to further consolidate the company's competitive advantage and provide a stable source for the company's income growth.
The first-mover advantage is obvious, and the market segmentation position is leading: the company is an early enterprise engaged in the development of rail transit lightning protection products and signal axis counting system, and has rich experience in technology development and project implementation. At present, the company's main products are rail transit signal axis counting system, railway station and yard integrated lightning protection system, signal monitoring lightning protection sub-cabinet, turnout snow melting system and other products and related solutions. at the same time, it provides engineering construction and system integration services for customers in the field of rail transit. In the field of rail transit signal control, the company's axle counting system has a strong competitive advantage. the company has successively completed innovative functions and solutions, such as train direction identification, direct reset, axle counting monitoring, interval axle counting, axle counting to solve poor shunting of railway track circuits, and so on. Since 2009, it has been applied in more than 100 urban rail transit lines in more than 30 cities, and has been applied in some railway lines, and occupies a leading position in the domestic market. In the field of comprehensive lightning protection, the company is one of the earliest enterprises engaged in railway signal lightning protection in China, and takes the lead in developing patented product lightning protection distribution cabinets in the industry. up to now, more than 4000 integrated station and yard lightning protection systems have been implemented. occupies a leading position in the market.
New infrastructure helps rail construction, capacity release and competitiveness: rail transit, as an important national infrastructure, is an important direction of investment in new infrastructure. Local governments at all levels regard rail transit construction as an important measure to stabilize growth, and urban comprehensive transportation system as an important part of promoting a new type of urbanization. Benefiting from the rapid development of the urban rail transit industry, the company has sufficient orders on hand and a good guarantee for performance growth. At the same time, the company has built a new automatic production base in Jinwan District, Zhuhai City, and plans to set up core parts production lines, automatic assembly lines, precision quality testing equipment, and supporting production management software to create a lean production system. At that time, the company in the main business capacity scale, core process level, product quality level and other aspects will be improved, which is conducive to the sustained growth of the company's performance.
Give a rating of "overweight". It is estimated that the company's operating income from 2020 to 2022 is 399 million yuan, 481 million yuan and 577 million yuan respectively, and the net profit returned to its mother is 161 million yuan, 198 million yuan and 242 million yuan respectively. Corresponding to the previous stock price, the dynamic PE is 28, 23 and 19 times respectively.
Coverage for the first time, giving a "overweight" rating.
Risk tips: macroeconomic and policy change risk; rail transit investment is less than expected risk; raw material price fluctuation risk and so on.