The company's 20H1 revenue fell 15% from the same period last year, and its performance dropped 54% from the same period last year. In the first half of 2020, the company realized revenue of 313 million yuan, year-on-year-14.82%; net profit of 31 million yuan,-54.12%; and deduction of non-return net profit of 4 million yuan,-94.16% of the same period last year. The sharp decline in performance was mainly due to the decline in income and the increase of depreciation expenses, which accounted for more than 60% of costs under the influence of the epidemic. In a single quarter, the company's 20Q2 achieved revenue of 217 million yuan, + 1.98% compared with the same period last year, and net profit of 74 million yuan, + 43.93% compared with the same period last year. The gross profit margin / net profit rate of the company's 20Q2 is 53.94% and 34.39%, which is 10.02 pct higher than that of the same period last year. The increase in net profit is mainly due to the substantial increase in government subsidies. The company management (including R & D) / sales / financial expense rate is 22.07%, 0.81% and 12.12%, which is 4.94 pct higher than that of the same period last year. The company's net operating cash flow was 194 million yuan, down 24.81% from the same period last year, and still maintained a good performance.
With the rapid growth of industry demand, the company's capital expenditure is slowing down the net interest rate inflection point is coming. from a product point of view, the company's 20H1 high-voltage electrical appliances testing / low-voltage electrical appliances testing / environmental testing realized sales revenue of 2.43 million yuan, 0.48 million yuan, compared with the same period last year,-15.30 percent, 21.37 percent, 0.53 percent, and revenue accounted for 77.54 percent, 15.24 percent, 5.68 percent, respectively. According to the data of the China Commission of recognition and Supervision, the size of China's electronic and electrical testing market has increased from 9.249 billion yuan in 2016 to 17.962 billion yuan in 2019, with CAGR reaching 24.76%. The industry has maintained rapid growth. The company's high-voltage electrical testing and subdivision track has benefited from the country's large-scale investment plans such as distribution network, smart grid and UHV, as well as favorable policies such as the 13th five-year Plan for power equipment. as an absolute leader in this field, the company is expected to benefit deeply. The company has made a large amount of investment in fixed assets in the past few years, and most of the projects are expected to be completed in 2020, so the company's depreciation expense is expected to reach the highest value in 2021, and the growth rate of depreciation expense will obviously slow down in 2021. The subsequent depreciation expense will show a trend of decreasing year by year, the company's net interest rate is expected to rise at an inflection point, and the performance elasticity will be accelerated.
Investment suggestion: give an one-year reasonable valuation of RMB 13.20-14.85. we expect a net return profit of RMB 1.84G in 2020-22, corresponding to PE36/27/19 times, with reference to comparable companies giving an one-year reasonable valuation of RMB13.20-14.85RMB (corresponding to the PE value of 40-45x in 2021) and maintain the "buy" rating.
Risk Tips:
Income falls short of expectations; net interest rate rises less than expected; credibility is affected.