Shen Hao Technology: industrial equipment testing expert, Deep ploughing Intelligent Technology to meet Breakthrough Shen Hao Science and Technology was founded in 2002, currently specializing in the research, development, production and sales of intelligent robots and intelligent monitoring equipment in the field of industrial equipment testing and fault diagnosis. The company's electric power inspection robot ranks first in the market share in Zhejiang Province, and intelligent monitoring equipment has been sold to more than 20 provinces in China. In 2020, the company achieved revenue of 612 million yuan, 2016~2020CAGR 33.32%, net profit of 162 million yuan, 2016-2020 CAGR 36.58%, maintaining rapid growth. The company's main products have high technical content, with a gross profit margin of more than 58% in the past three years, a net profit rate of more than 25%, and strong profitability.
Under the two-pronged approach of "R & D + after-sales", the efficient team forms a virtuous circle. From 2016 to 2020, the proportion of R & D personnel increased from 17.36% to 36.81%. Through the formulation of efficient and rigorous R & D process, the company's product richness has been improved rapidly. The proportion of after-sales personnel reached 26%, respond positively to terminal feedback, proceed from solving the pain points of the industry, and form a virtuous circle in which technology, market and products promote each other.
The "intelligent" direction of the power industry is clear, and the advantages of intelligent inspection links are obvious. China formally put forward the concept of "smart grid" in 2009, which aims to comprehensively improve the work efficiency of all aspects of electric power and achieve the optimal allocation of resources and energy. In recent years, the smart grid accounts for more than 10% of the total investment in the grid. At the beginning of the 14th five-year Plan, it is clear that the construction of the smart grid will be strengthened in the 14th five-year Plan of many provinces. Compared with the traditional manual inspection, intelligent patrol inspection has obvious advantages and is expected to play an important role in ensuring the security and stability of electric power.
Cut into the field of rail relations, the next blue ocean market is ready to start.
During the 13th five-year Plan period, China's urban rail transit increased by 4351.7 km, and it is expected that during the 14th five-year Plan period, the scale of investment in the rail transit field is expected to remain stable. The inspection of rail transit industry is similar to that of electric power industry, which brings the possibility for the application of inspection robot in the field of rail transportation. The company began to lay out the market research and research and development of rail transit related products in 2018, and successfully launched the multi-functional rail line inspection robot and train bottom inspection robot in 2020, compared with the traditional manual, the efficiency of operation and maintenance and the quality of patrol inspection have been greatly improved. According to our estimates, the market space for rail crossing inspection robots is more than 10 billion, which is expected to help the company move to a higher level.
Profit forecast, valuation and investment rating: we expect the company to achieve operating income of 8.5,11.8 and 1.59 billion yuan in 2021-2023, an increase of 38.9%, 38.8% and 35.1% respectively over the same period last year, and a net profit of 2.24,3.23 and 441 million yuan respectively, an increase of 37.9,44.8% and 36.2% EPS 1.52,2.20,3.00 yuan respectively (taking into account the latest equity changes). Corresponding to PE 28, 20 and 14 times. With reference to the valuation level of the comparable company, and considering that the company has cut into new areas to further open the growth ceiling, it will be given a "recommended" rating of 2025 times PE in 2022, with an one-year target market capitalization of 6.46 billion yuan and a target price of 43.96 billion yuan, with a target price of 43.96 yuan and 55.1 yuan for the first time.
Risk hint: the intelligent promotion of electric power is not as expected; the verification of rail transit client is not as expected; and the infrastructure investment in our country is not as expected.