Incident: The company released its 2020 three-quarter report. The company achieved operating income of 210 million yuan in the first three quarters of 2020, +33.74% year on year; achieved net profit of 34 million yuan to the mother, +32.71% year on year. Q3 achieved operating income of 75.42 million yuan in a single quarter, +34.32% year on year; net profit of the mother was 6.8963 million yuan, -24.65% year on year.
Benefiting from an increase in IoT smart gas meter sales and the company's development of new customers, the company's revenue in the first three quarters of 2020 was +33.74% year-on-year. The company achieved revenue of 210 million yuan in the first three quarters of 2020, +33.74% year on year. Mainly: 1) The share of sales of IoT smart gas meters has increased, and their unit sales price is higher than that of IC card smart gas meters; 2) the company continues to develop new customers, and the number of sales has also increased year-on-year.
Q3 The company was mainly dragged down by product operating costs and management expenses. The net profit of the mother was -24.65% compared to the same period last year. 2020Q3 achieved operating income of 75.42 million yuan, +34.32% over the same period last year; it achieved net profit of 6.8963 million yuan, -24.65% year on year. Mainly: 1) Q3 gross profit margin was 38.05%, down 5.3 pct from Q2, causing the increase in operating costs to be higher than the increase in operating income; 2) the increase in the company's current staff wages, intermediary consulting fees related to listing, and depreciation expenses related to the company's Q3 management expenses were 7.013,300 yuan, +90.60% year on year
The company expanded production capacity during the reporting period, with projects under construction +121.02% compared to the beginning of the year. The company's construction projects in the first three quarters of 2020 amounted to 81,5617 million yuan, up +121.02% from the end of 2019. We are at “Qinchuan IoT:
According to “Integrated Gas Meter R&D and Producer, Embracing the IoT Gas Meter Era”, the company's previous development was limited by production capacity, and the company's size was small. The future will benefit from the rapid expansion of the industry's IoT smart gas meter era plus the company's IPO. We expect the company's scale to double in 2-3 years.
The company's R&D technical advantages+integrated structural design capabilities have built a strong moat for the company.
The company's key technical indicators in the field of gas meter manufacturing are superior to European, American and Japanese standards. By the end of 2019, the company had 92 invention patents and set 17 national standards, far higher than comparable companies. The company has world-leading gas meter technology and industry standard setting advantages. The technical indicators of the company's products in terms of intelligent metering and intelligent valve control are in a leading position in the industry and the world. They are superior to European standards and Japanese standards in terms of indicators such as electromechanical conversion errors, electronic metering errors, switching valve current, switching valve time, service life of electromechanical valves, and valve leakage.
Profit forecast and investment rating: We expect the company's EPS in 2020-2022 to be 0.39, 0.57, and 0.79 yuan respectively, and the corresponding PE is 54, 36, 26 times. Considering the accelerated promotion of NB-IoT in the context of smart cities, the company, as a company with integrated design and production of smart gas meters, will fully benefit from the dividends brought by industry product upgrades. Therefore, we maintain the company's “buy” rating.
Risk warning: NB-IoT network promotion falls short of expectations; the release of the company's production capacity falls short of expectations, and the company's orders fall short of expectations