\u3000\u3000 Winner Medical Co.Ltd(300888) (300888)
Revenue / performance decline in 2021 under high base. 1) The company announced that in 2021: ① the operating revenue was 7.9 ~ 8.2 billion yuan, with a year-on-year increase of – 36 ~ – 34% / + 75% ~ + 82% respectively in 2020 / 2019; ② The performance was RMB 1.20 ~ 1.35 billion (including share based payment fee of RMB 80 million), with a year-on-year increase of – 69% ~ – 65% / + 120% ~ + 147% respectively in 2020 / 2019. ③ Deduct non performance of RMB 1 ~ 1.15 billion, with a year-on-year increase of – 73% ~ – 69% / + 108% ~ + 139% respectively in 2020 / 2019. 2) We estimate that the net interest rate is about 15% ~ 17%, a year-on-year decrease. We judge that it is mainly due to the high sales price of medical protection products in 2020 and the improvement of profit quality. In 2021, the epidemic situation tends to stabilize and the product volume and price return to normal. 3) According to the range center, we estimate that the revenue / performance of 2021q4 decreased by about 25% year-on-year / 70% ~ 75% year-on-year respectively.
Consumer goods: steady growth and product innovation. In 2021, the revenue of consumer goods business was 4-4.2 billion yuan, with a year-on-year increase of 14% ~ 19% (we estimate that it will increase by 33% ~ 40% over 2019); After excluding mask products, the revenue was 3.9 ~ 4.1 billion yuan, with a year-on-year increase of 23% ~ 29%. We estimate that the sales of consumer goods in 2021q4 (according to the interval Center) increased by about 16% year-on-year. 1) From the perspective of sub channels: ① the annual sales of offline stores increased by 30%, and the number of stores increased steadily. We expect that in the future, the expansion of stores will focus on medium-sized stores and rely on franchisees. ② The annual sales of self owned e-commerce such as official websites and small programs increased by about 40%, and the growth of e-commerce was assisted by private domain traffic. By the end of 2021q3, the number of brand users exceeded 34 million. ③ The annual sales of tmall, jd.com and other third-party platforms were flat year-on-year. 2) From the perspective of products: we judge that the sales of bedding, adult clothing, baby and children’s products and sanitary napkins are growing rapidly. At the same time, the company continues to launch new products such as super soft face towels and hyaluronic acid wet compress cotton pads to drive sales.
Medical business: the scale has returned to normal and the channels have been widened. In 2021, the medical business income was 3.9-4 billion yuan, with a year-on-year increase of – 56% – 55%, an increase of 160-166% over 2019. We estimate that (according to the interval Center) 2021q4 medical business sales fell by about 51% year-on-year. 1) In 2020, the supply base of overseas medical protection products decreased significantly year-on-year due to the shortage of medical protection products. At present, the epidemic situation tends to be stable, so the volume and price of products fall year-on-year. We judge that the future growth will be mainly driven by volume. 2) From the perspective of different channels, China’s private brand business performed well. By the end of 2021h1, nearly 11W pharmacies and 3000 + hospitals had been stationed in China: ① the annual sales of hospitals increased by about 10%; ② The annual sales of e-commerce increased by about 55%; ③ The annual sales of overseas exports decreased by about 70%.
The high base has passed and is expected to enter a healthy growth channel throughout the year. In 2021, the company’s business scale is expected to shrink year-on-year under the high base of last year. Looking forward to 2022, with the promotion of new products in the cotton era, rich channels, building a lifestyle, steady and rapid development of private brand business, the company is expected to usher in healthy growth. Investment advice We are optimistic about the potential for the coordinated development of medical treatment and consumption in the medium and long term. The short-term business of the company fluctuates due to changes in environmental factors. We adjust the profit forecast and predict that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.30/16.1/1.98 billion respectively, corresponding to 20 times of PE in 2022, maintaining the “buy” rating.
Risk warning: covid-19 epidemic exceeded expectations, which was unfavorable to the terminal sales of consumer goods; Market competition intensifies risks; Category expansion risk; Overseas business expansion is less than expected; Foreign exchange fluctuation risk.
