3Q20 homing net profit year on year + 17%, lower profit forecast, target price 64 yuan / share 1-3Q20 company to achieve revenue / homing net profit / deduction non-homing net profit 1.58 hundred million yuan, year-on-year + 6.3% Company1.7% Plus 1.8% 3Q20 realized revenue / return net profit / deducted non-return net profit RMB 2.57max 0.57 / 55 million, compared with the same period last year, + 24% plus 17% net profit 21%. The growth rate of return net profit is in line with the performance forecast (+ 2.0% net profit 28.5%). Sales of the vehicle inspection system have gradually returned to normal, the new fixed increase plan has been steadily advanced, and the layout of vehicle inspection operation is expected to be accelerated. Downgrade profit forecast, 20-22 EPS is expected to be 1.16 EPS 1.57 + 2.18 yuan, given 21-year 41x target PE, target price 64 yuan / share, maintain "overweight" rating.
The new rules on exemption from inspection are originally intended to facilitate the people, and have a limited impact on the scale of the vehicle inspection market. The Ministry of Public Security will implement new measures from November 20, 2020 to expand the scope of exemption for motor vehicles, including 7-9-seat private cars within 6 years, and from once a year for 6-10 years to once every two years. The original purpose of the policy is to facilitate the people, not to relax vehicle inspection standards. We estimate that the number of vehicle inspections nationwide will be about 10% less than before from the beginning of the 21st year; considering that the testing price of private cars is lower than that of operating passengers / trucks, and some areas may continue to raise prices in the future, this adjustment will have less impact on the size of the vehicle inspection market.
The number of vehicle inspection stations is growing steadily, and there is still room for the growth of vehicle inspection systems and new equipment. The regional imbalance between supply and demand and the upgrading of vehicle inspection demand. We believe that the number of domestic vehicle inspection stations will continue to grow steadily in the next 3-5 years, and the company's vehicle inspection system business will still benefit. We estimate that the revenue of the company's vehicle inspection system in 20-22 will be 8.5pm 94pm 1.13 billion yuan respectively, the net profit contributed by CAGR=7%, in 19-22 years will be RMB 1.5100,000,000; the total revenue of other new equipment is expected to be 0.99pm 120000000 yuan, CAGR=36%.
The new fixed increase plan is advancing steadily, and the layout of vehicle inspection operation is expected to be speeded up.
On October 20, the company put forward the fixed increase plan again, intending to raise 1.3 billion yuan, of which 300 million was used to replace the acquisition funds of Linyi and 1 billion was used for the construction project of chain motor vehicle testing stations. The company takes the acquisition as one of the main means to promote the vehicle inspection operation business. After Linyi merges the table, we estimate that the company's vehicle testing service income will be 0.67 billion yuan in 20-22, and the net profit contributed by the combined meter testing station in 19-22 CAGR=148%; will be 0.15 billion yuan. Following the landing of the fixed increase plan, we expect that the acquisition of the testing station is expected to speed up, and the investment income of the testing station is expected to be 0.110.43 million yuan.
Downgrade profit forecast, target price 64 yuan, "increase" rating
Considering the delay of bidding for new products such as tail gas remote sensing and super control, the profit forecast is lowered, and the net profit for 20-22 years is expected to be 2.2 × 3.0 × 10 ~ 8 yuan (the previous value is 2.5 × 360 ~ 5.0 billion yuan), corresponding to EPS of 1.16 ~ 1.57 ~ 2.18 yuan, and corresponding to PE 37 ~ 27max 20x. With reference to the comparable company's 21-year Wind consensus expectation that the average PE is 47x, and the new exemption rules suppress the valuation of the vehicle inspection industry, we give the company a 21-year 41x target PE of 64 yuan per share (previous value 94 yuan). Maintain the "overweight" rating.
Risk hints: the speed of new construction of testing stations slows down; remote sensing business is not as expected; the progress of acquisition is uncertain; the risk of raw material price fluctuations.