\u3000\u3000 Winning Health Technology Group Co.Ltd(300253) (300253)
Investment Event: the company released the forecast of 2021 annual report: the company expects the net profit attributable to the parent company to be 343.77 million yuan – 466.55 million yuan, a year-on-year decrease of 5% – 30%, deducting the net profit not attributable to the parent company to be 186.52 million yuan – 298.43 million yuan, a year-on-year decrease of 20% – 50%.
The performance has been steadily promoted, the income has increased steadily, and the structure of traditional medical information business has been optimized. During the reporting period, the company’s business progressed steadily, and many business lines such as hospital it and public health it achieved stable growth. In terms of orders, in 2021, the amount of newly signed orders for the company’s traditional medical information business increased by more than 25% year-on-year. The rapid growth of newly signed orders indicates the strong demand of downstream customers. In terms of revenue, the company expects the growth rate of total revenue in 2021 to be as high as 20% – 25%, of which the revenue from software sales and technical services with high gross profit margin increased by 10% – 15% year-on-year, the revenue from hardware sales business with low gross profit margin decreased slightly, and the structure of traditional medical information business was further optimized. During the reporting period, the net profit attributable to the parent company decreased year-on-year, which was mainly affected by factors such as share based payment expenses, withdrawal of convertible bond interest, increase of bad debt provision of accounts receivable and so on.
The Internet plus medical and health innovation business has been developing rapidly, and its revenue has exceeded 500 million yuan, and the business ecosystem has initially become a system. The company continues to deepen the “two wheel drive” strategy, and accelerate the development of Internet plus healthcare innovation business. The company’s innovative business is operated by subsidiaries, and the consolidated Weining Internet, Nari health and key technology achieved an income of more than 500 million yuan during the reporting period, with a year-on-year high-speed growth. If Weining technology, which has not been consolidated, is added, the company’s innovation business income is expected to exceed 600 million yuan, and the business shows obvious signs of acceleration. In terms of revenue scale, the company’s innovative business has initially formed an ecosystem, and different business segments are expected to promote each other and maintain rapid development.
The implementation of venex product system was accelerated, new products were widely recognized by the market, and the support system was gradually improved. 2021 is the market expansion period of the company’s venex products. By the end of the year, there have been more than 200 pilot hospitals, basically pilot cases in all provinces, and the products have been widely recognized by downstream customers. Focusing on the deployment and implementation of venex products, the company has established a remote deployment center in Shanghai to support local remote deployment and implementation. In 2022, the company will build two more remote deployment centers to support the full promotion of the company’s venex products in the country in 2023. On the whole, the pilot work of venex has been comprehensively promoted, the product system has been gradually enriched, the support system has been gradually improved, and the implementation of venex products is in good condition.
Investment suggestion: as the company’s performance is affected by covid-19 epidemic and increasing strategic investment in innovative business, we reduce the company’s profit expectation. We expect that the company’s revenue in 2021, 2022 and 2023 will be 2.793/33.63/4.134 billion yuan, and the net profit will be 410 / 600 / 804 million yuan, corresponding to 63.19/43.19/32.23 times of PE respectively. Considering the high prospect of the medical IT industry and the strong competitive advantage of the company, we give the company a “buy” rating.
Risk tip: business development is less than expected and policy promotion is slow
