A leader in the field of inspection and testing, covering a wide range of fields such as housing construction and infrastructure engineering. The company is a quality science and technology service enterprise with inspection and testing business as the strategic leader, and collaboratively developing specialized services for special engineering, new engineering materials, etc. We provide customers with professional solutions, focusing on inspection, certification consulting, survey and design, special construction, green building materials, and environmental services. Our business covers housing construction, municipal administration, water conservancy, transportation, railways, geotechnical, environmental, safety, information and other fields. The compound growth rate of the company's revenue in 2019-2021 was 19.23%, and the compound growth rate of Guimu's net profit was 42.75%. Looking at the company's revenue by business in 2021, testing technology services, special engineering services, product sales, software development, and other businesses accounted for 50.15%, 25.21%, 24.50%, 0.03%, and 0.11%, respectively.
The inspection and testing services market is at a peak of development, and the company has broad scope for development. According to the “2021 National Inspection and Testing Service Industry Statistics Report Simplified Edition” issued by the General Administration of Market Regulation, the revenue of China's inspection and testing industry reached 409.022 billion yuan in 2021, an increase of 14.06% over the previous year. From 2013 to 2021, the revenue of China's inspection and testing industry increased by 192.37%, with an average compound annual growth rate of 14.35%. We believe that the market is improving rapidly and that the industry is developing well. The market share of the company's inspection and testing business in 2021 was 0.13%. We believe the company will increase its market share through mergers, acquisitions and restructuring, and the establishment of cross-regional subsidiaries, branches, and offices. The company's business area gradually moved beyond Changzhou and Jiangsu, developed towards a “nationalized strategic layout”, and targeted neighboring international markets such as Vietnam. By region, business outside Changzhou and Changzhou (within Jiangsu Province), outside Jiangsu Province, and abroad accounted for 48.41%, 33.36%, 15.85%, and 2.27% respectively.
Mastering testing technology in various fields, new contracts signed and conversion rates are increasing year by year. (1) Master technology in various fields and participate in the formulation of national standards: After years of accumulation and accumulation, the company has mastered inspection and testing technology in various fields, involving the comprehensive application of chemical, physical and other science and technology. Many mature and efficient inspection methods are widely used in the company's business development. The business areas include housing construction, municipal administration, water conservancy, railways, transportation, urban rail transit, and environmental protection. The company has hosted or participated in the formulation of national standards and industry standards many times. (2) Continued expansion of inspection parameters: In 2019-2021, the company continued to expand the range of inspection parameters and was able to provide customers with more comprehensive inspection and testing services. The company's inspection and testing expansion parameters were divided into 892, 1409 and 1,523, and testing parameters were gradually increased and improved. (3) The number of new contracts signed and the conversion rate increased year by year: the amount of new contracts signed for the company's inspection and testing business in 2021 was 598 million yuan, an increase of 35.23% over the previous year. The conversion rate of new contracts signed increased from 36.81% in 2019 to 47.72% in 2021. The amount of new contracts signed by the company and the contract conversion rate increased year by year.
Profit forecasts and ratings. The company overraised 782 million yuan to help the company rapidly develop market layout, while announcing a restricted stock incentive plan to further bind core employees. The company has sufficient capital on hand, a low balance ratio, and a high ROE level. We expect the company's EPS in 22-23 to be 1.09 yuan and 1.34 yuan respectively, giving a price-earnings ratio of 25 times that of 23 years. The corresponding target price is 33.50 yuan. It was covered for the first time, giving it a “superior market” rating.
Risk warning. Repayment risk, policy risk, economic downturn risk.