The hottest company comments on Ningbo water meter

2022-09-23
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[company comments] Ningbo water meter (603700) - the leading enterprise of mechanical water meters, the smart water meter market will expand steadily in the future

source: Securities Research

Liu Lancheng - mechanical industry analyst

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this article is extracted from: the company's report issued on January 19

think about the mechanical industry analyst

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Wu Peiwei

Abstract

◆ the company's main business is mechanical water meters and smart water meters, and covering a full range of civil There are more than 600 models of industrial water meters, with sales covering more than 80 countries and regions. It is one of the important water meter manufacturers

◆ the company expects to realize a net profit attributable to the parent company of 206-233 million yuan in 2019, with a year-on-year increase of 50-70%; In 2018, the company achieved a revenue of 406 million yuan (+68.99%), and the revenue share of smart water meters increased from 29% in 2017 to 39% in 2018. The company is changing from a mechanical water meter to a pattern in which mechanical and intelligent meters go hand in hand

◆ with the promotion of urbanization and the implementation of the policy of one meter per household, the number of water meters in the country will increase steadily, and the penetration rate of intelligent water meters will also gradually increase. Therefore, the market space of intelligent water meters in the future is broad. According to our calculations, at the beginning of 2017, the national water storage meter was about 2 Within the range of 0.2 billion units, if the annual penetration rate of intelligent water meters reaches 35%/40%/45%, the demand for intelligent water meters will be 19 million/20.5 million/21.5 million units respectively, and its market space will reach at least 57/62/6.5 billion yuan

◆ the company raised and invested 4.05 million intelligent water meters, which will contribute a large increase to revenue after delivery, and the gross profit margin of intelligent water meters is higher than that of mechanical meters, which can have a positive impact on net profit. We expect the annual EPS to be 1.41/1.83/2.21 yuan and PE to be 20/15/13 times respectively, giving a "recommended" rating for the first time

core view

the company is an old brand water meter manufacturer, and its products are widely sold.

its main business is mechanical water meters and intelligent water meters. Its products cover a full range of large and small caliber civil and industrial cold and hot water meters, with a total of more than 600 models, and its sales cover more than 80 countries and regions around the world. It is one of the important domestic and even global water meter manufacturers. Through continuous independent research and development and technical cooperation, the company has accumulated rich technological achievements. 1 Adjust the technical experience and process experience of experimental devices, have been authorized by 100 patents, and are responsible for drafting or participating in many national and industrial internal standards. It is a leading enterprise in the water meter industry

mechanical water meters and intelligent water meters go hand in hand, and the sales scale and roe remain the highest in the industry.

the company released the 2019 performance forecast, and it is expected to achieve a net profit attributable to the parent company of 206-233 million yuan, an increase of 50% - 70% year-on-year; It is estimated that the net profit of non deduction will be 184-206 million yuan, an increase of 40% - 60% year-on-year. The company achieved revenue of 814/1029/913 million yuan in the first three quarters, with a year-on-year change of -1.46%/26.42%/26.21%. In 2018, the revenue of smart water meters reached 406 million yuan (+68.99%), and the proportion of smart water meters increased from 29.48% in 2017 to 39.41% in 2018. The company is changing from a situation dominated by traditional mechanical water meters to a pattern in which mechanical and intelligent water meters go hand in hand. The gross profit margin of the company in the first three quarters of 2019 reached 34.82%; The return on net assets was 11.54%, significantly higher than the industry average

the market demand for smart water meters is growing steadily, and the future market space will reach 10 billion

with the promotion of urbanization and the gradual implementation of the policy of one meter per household, the number of water meters in the country will increase steadily. At the same time, with the full implementation of smart water, the penetration rate of smart water meters will also gradually increase. Therefore, the future market space of smart water meters is the touchstone of the pendulum type film impact tester, which has broad advantages. According to our calculations, at the beginning of 2017, the national water storage meter was about 2 Within the range of 0.2 billion units, if the penetration rate of intelligent water meters reaches 35%/40%/45% in 2020/2021/2022, the demand for intelligent water meters will be 19 million/20.5 million/21.5 million units respectively, and its market space will reach at least 5.7 billion/6.2 billion/6.5 billion yuan

as a leader in the water meter industry, the company gave a recommended rating for the first time.

researchers at East Peking University in the United States developed a new method to raise 4.05 million smart water expression catheters for 3D printing of premature infants or other important medical equipment. After delivery, it will contribute a large increment to revenue, and the gross profit margin of smart water meters is generally higher than that of mechanical water meters, which can have a positive impact on net profit. We expect the annual EPS to be 1.41/1.83/2.21 yuan and PE to be 20/15/13 times respectively, giving a "recommended" rating for the first time

risk tips: the promotion of one meter per household is less than expected, and the popularity of intelligent water meters is less than expected

rating system:

galaxy securities industry rating system: recommendation, cautious recommendation, neutral, avoidance

recommendation: it refers to that in the next 6-12 months, the industry index (or the industry index composed of companies covered by the analyst team) exceeds the average return of the exchange index (or the main index in the market) by 20% or more. The rating is given by analysts

cautious recommendation: the industry index (or the industry index composed of companies covered by the analyst team) exceeds the average return of the exchange index (or the main index in the market). The rating is given by the recovery analysts in the international market

neutral: the average return of the industry index (or the industry index composed of companies covered by the analyst team) is equivalent to that of the exchange index (or the main index in the market). The rating is given by analysts

avoidance: the industry index (or the industry index composed of companies covered by the analyst team) is 10% or more lower than the average return of the exchange index (or the main index in the market). The rating is given by analysts

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