\u3000\u3000 Winner Medical Co.Ltd(300888) (300888)
Event: the company released the performance forecast for 2021. It is estimated that the annual operating revenue in 2021 will be 7.9 billion yuan – 8.2 billion yuan, a year-on-year decrease of 36.48% – 34.07%; It is estimated that the net profit attributable to the parent company will be 1.2-1.35 billion yuan, a year-on-year decrease of 68.51% – 64.57%; It is estimated that the net profit deducted from non parent company is RMB 1 billion to RMB 1.15 billion, with a year-on-year decrease of 73.34% – 69.34%.
Comments:
Affected by price normalization and high base, the income of medical business decreased significantly. The medical consumables business is expected to achieve a revenue of 3.9 billion yuan to 4 billion yuan in 2021, a year-on-year decrease of 56.28% – 55.16%, an increase of 159.23% – 165.88% over the same period in 2019. In 2021, the global production capacity of medical protection products increased significantly, and the sales price returned to normal. Under the influence of the high base in 2020, the annual medical business income decreased significantly. In terms of sub channels, the overseas export revenue decreased by about 70%, and the revenue of Chinese hospitals / e-commerce channels increased by about 10% / 55% respectively. The company’s brand popularity and channel coverage in China have increased steadily, and the C-end channel is expected to become the main driving force of revenue growth.
The consumer goods business grew steadily, and stores and self owned e-commerce performed well. The company’s healthy living consumer goods business is expected to achieve a revenue of 4 billion yuan to 4.2 billion yuan in 2021, a year-on-year increase of 13.73% – 19.42%, and an increase of 32.98% – 39.63% over the same period in 2019. After excluding mask products of the same caliber, the annual revenue was 3.9-4.1 billion yuan, with a year-on-year increase of 22.69% to 28.98%. The steady growth of the consumer goods business was mainly due to: (1) the impact of the epidemic on offline retail was weakened in 2021, and the number of stores of the company increased steadily; (2) The company has actively built an online private domain platform and achieved good results. In 2021, the sales revenue of the company’s offline stores / wechat apps, official websites and other self owned e-commerce platforms / tmall, jd.com and other third-party platforms increased by about 30% / 40% / flat year-on-year respectively.
Normalization of medical protection products & equity incentive fees reduce profit space. In 2021, the company raised a total share based payment fee of about 80 million yuan. After excluding this factor, the annual net profit attributable to the parent company is expected to be 1.28 billion yuan – 1.43 billion yuan, a year-on-year decrease of about 66.41% – 62.47%. In 2021, the price of medical protection products returned to normal, which significantly suppressed the gross profit margin and narrowed the profit space.
Investment suggestion: affected by the normalization of medical protection products, the company’s performance is under pressure in the short term. In the long run, with the coordinated development of the company’s medical business and consumer goods business and the continuous optimization of channel structure, the company’s performance growth potential is worth looking forward to. We lowered the company’s profit forecast and predicted that the net profit attributable to the parent company in 21 / 22 / 23 will be RMB 1.310/16.39/2.037 billion (the original forecast value was RMB 1.712/21.21/2.513 billion), corresponding to 23 / 19 / 15 times of the current market value PE respectively, maintaining the “buy” rating.
Risk tip: the channel expansion was less than expected, and the export of medical business fell.
