Key points of investment:
Environmental monitoring is the basic platform, expanding application scenarios in various fields. The company is one of the pioneers in the domestic environmental monitoring and analytical instrument market. It has been deeply involved in the field of analytical instrument manufacturing for more than 20 years. Its main business is environmental monitoring. It has now formed five core technology platforms in spectroscopy, chromatography, mass spectrometry, energy spectroscopy and sensorology. It has comprehensive platform advantages and has more than 50,000 sets of successful application experience in various fields. The company's 21-23H1 environmental monitoring system accounts for more than 50% of the revenue, which is the company's core business. In 2022, the company achieved revenue of 1,505 billion yuan, +8.97% YoY; net profit to mother was 284 million yuan, +27.89% YoY.
The policy-driven carbon monitoring test site is expected to become a new growth point for the company. Starting in September 2021, the Ministry of Ecology and Environment launched a pilot project for online monitoring and evaluation of carbon dioxide. The company's environmental monitoring products include air, water, and soil environmental monitoring and pollution source emission monitoring systems, etc., and have an innate customer base advantage in the carbon emission and greenhouse gas monitoring business process. The company attaches great importance to carbon monitoring business and has participated in carbon emission monitoring test site applications in thermal power, steel, cement and other industries. With the continuous advancement of domestic carbon monitoring-related policies, increased support for online monitoring laws, and the gradual implementation of official application, the company's carbon monitoring business is expected to continue to expand, become a new performance growth point, and help improve the accuracy of carbon emission data.
Overseas mergers and acquisitions and independent research and development help localize scientific instruments. The company recently developed scientific instrument-related businesses such as chromatographs and mass spectrometers through the acquisition of overseas subsidiaries ORTHODYNE and KORE, respectively. After acquiring KORE in the UK, the company applied its mass spectrometry technology to the field of environmental monitoring. Belgian company ORTHODYNE can provide semiconductor manufacturers with a one-stop solution for process gas analysis to meet the needs of online real-time monitoring of various gases and impurities in the semiconductor manufacturing process.
In the future, the company is expected to give full play to the company's mass spectrometry technology advantages, expand new applications of mass spectrometry products, and help replace domestic scientific instruments.
Profit forecast and investment suggestions: We predict that the company's operating income in 2023-2025 will be 15.10, 18.12, and 2.147 billion yuan, respectively, and the net profit due to 2023-2025 will be 2.26, 3.04, and 401 million yuan respectively. The corresponding PE will be 19.88, 14.82, and 11.22 times, respectively. Combined with comparable company conditions, we will give 2024 a PE valuation of 20 times, with a target price of 9.56 yuan/share. First coverage, giving the company a “buy” rating.
Risk warning: Policy progress falls short of expectations; scientific instrument business development progress falls short of expectations; risk of recovering accounts receivable; risk of increased market competition