疫情影响收入确认，环境监测业务承压。2022 年全国多地出现疫情反复，公司的设备上门安装、调试环节受到一定不利影响，收入确认也有所延缓致使公司营收增速（+20.1%）略有下降。我们认为主要依赖政府采购的环境监测业务承压是公司增速不及预期的主要原因。疫情结束有望显著减轻地方政府财政压力，我们预测2023 年该业务的增速或将重新回到2021 年水平（20%+）。Matters:
On the evening of February 27, 2023, the company released its 2022 performance report. During the reporting period, the company achieved total operating income of 676 million yuan, an increase of 20.1% over the previous year; net profit attributable to owners of the parent company was 482,169 million yuan, an increase of 1.54% over the previous year; net profit attributable to owners of the parent company after deducting non-recurring profit and loss was 107.259 million yuan, a decrease of 24.12% over the previous year; and basic earnings per share of 0.36 yuan.
Commentary:
The pandemic affected revenue confirmation, and environmental monitoring operations were under pressure. In 2022, the epidemic was repeated in many parts of the country. The company's equipment installation and commissioning process was adversely affected to a certain extent, and revenue recognition was also delayed, causing the company's revenue growth rate (+20.1%) to decline slightly. We believe the pressure on the environmental monitoring business, which mainly relies on government procurement, is the main reason why the company's growth rate fell short of expectations. The end of the pandemic is expected to significantly reduce the financial pressure on local governments, and we predict that the growth rate of this business in 2023 may return to 2021 levels (20% +).
Reduce costs and improve labor efficiency, and there is still room for profit to be freed up. As of 22Q3, the company's sales expense ratio (28.3%) and R&D expense ratio (23.17%) were both higher than the average of previous years, mainly due to the company's personnel expansion in 2021 (R&D staff +121, sales staff +27). At present, R&D and sales team building for the company's various businesses have been basically completed. We believe that the company's expense ratio is expected to be clearly controlled in 2023, and more profits may be released.
The policy is strongly promoted, and the laboratory analytical instrument business can be expected in the future. In September 2022, the country successively introduced a number of favorable policies for enterprises, such as innovative tax cuts, interest-rate loans, medium- to long-term loans, etc., to stimulate downstream demand for scientific research instruments in universities, healthcare, enterprises, etc. Currently, the company's ultra-high liquid chromatography has been introduced to the market (order received from the Chinese Academy of Sciences). In the future, with the gradual advancement of policies and the continuous improvement of the company's product line, the company is expected to receive more orders in the field of laboratory analytical instruments.
Investment advice: Maintain the “push” rating, with a target price of 34.52 yuan in 2023. Considering the optimization of the epidemic prevention policy and the continuous advancement of the interest-rate loan policy, we kept our original forecast unchanged: the company's net profit in 2023-2024 was 120 million yuan and 180 million yuan respectively. Using the segmented valuation method, the company's business was divided into traditional environmental monitoring instruments and high-end scientific instruments. In the environmental monitoring instrument sector, we selected the company's main competitors Juguang Technology, Sydillon, and Hexin Instruments as comparable companies, and gave the 2023 target PE 20 times (Juguang Technology also has a high-end scientific instrument business, so a certain discount is given); in the high-end scientific instrument sector, we selected Dingyang Technology and Puyuan FinTech as comparable companies, and gave the 2023 target PE 50 times. Assuming that each sector's net profit share is the same as gross profit, the company was given a target price of 34.52 yuan for 2023.
Risk warning: Domestic substitution falls short of expectations, risk of R&D failure, risk of industrialization failure, intensification of industry competition, policy promotion falling short of expectations, and greater reliance on government subsidies and tax incentives.
