\u3000\u3000 Shanghai Sanyou Medical Co.Ltd(688085) (688085)
Event: the company released the performance express of 2021, and achieved an operating revenue of 593 million yuan in 2021, with a year-on-year increase of 51.97%; The net profit attributable to the parent company was 186 million yuan, a year-on-year increase of 57.20%; Deduct non net profit of 126 million yuan, with a year-on-year increase of 32.66%.
The performance is in line with expectations, a high proportion of R & D investment continues to enrich product types, and the medium and long-term growth can be expected. According to the performance express, the growth rates of the company’s operating revenue and net profit attributable to the parent company in 2021 were 51.97% and 57.20% respectively, which were near the median value of the performance forecast, deducting the growth rate of non net profit by 32.66%, maintaining a rapid growth. Among them, the impact of non recurring profit and loss on net profit is 60.84 million yuan, which is mainly due to the income from changes in the fair value of financial assets held by the company, government subsidies and financial management income. After deducting non recurring profit and loss, the company’s performance still maintains rapid growth. We expect it to be mainly due to three reasons: first, the orderly progress of orthopaedic surgery in the hospital after the epidemic has been effectively controlled; Second, the company actively promotes the promotion of innovative products, continuously promotes the further sinking of channels, and realizes the steady improvement of product sales; Third, the combination of Shuimu canopy in July 2021 will have a positive impact. The company continued to increase R & D investment. In 2021, the R & D expenditure was 56.55 million yuan, with a year-on-year increase of 66.74%, accounting for 9.53% of revenue. The main reason is that the company continues to focus on therapy innovation and new business R & D investment, and continues to increase investment in spine therapy innovation, sports medicine, ultrasonic bone power system, trauma and other fields. Quarterly, the growth rates of operating revenue, net profit attributable to parent company and net profit deducted from non net profit in a single quarter of 2021q4 were 43.53%, 88.14% and 49.26% respectively.
The ultrasonic hemostatic knife has been approved for listing in China, which is expected to break the import monopoly and further enrich the company’s product categories. The company announced on November 25 that the ultrasonic hemostatic knife independently developed by Shuimu Tianpeng has obtained the medical device registration certificate. It is used to cut and stop bleeding of soft tissue during surgery and can be used to close blood vessels with a diameter of no more than 3mm. The technical indicators of the ultrasonic bone knife series products of Shuimu Tianpeng are better than those of similar international and Chinese brands. Its ultrasonic hemostatic knife has previously obtained the EU registration certificate. The approval for listing in China will further promote the sales of relevant products in the Chinese market and have a positive impact on the future development of the company.
The internationalization strategy has been steadily promoted. The company’s innovative products, double headed nail system (including the third generation of double headed nails) and Clif keystone peek fusion system, were approved by FDA in September 2021. The products can be widely used for lumbar degeneration, spondylolisthesis, spinal deformity and adult scoliosis. The design and treatment have reached the international leading level, which is helpful for the company to explore the American market It is of great significance to further promote the implementation of internationalization strategy.
Profit forecast and investment suggestions: according to the performance express, we adjusted the profit forecast. It is estimated that the company’s revenue from 2021 to 2023 will be 593, 792 and 1056 million yuan (598, 797 and 1062 million yuan before adjustment), with a year-on-year increase of 51.97%, 33.45% and 33.32%, and the net profit attributable to the parent company will be 186, 265 and 354 million yuan (183, 258 and 345 million yuan before adjustment), Year on year growth of 57.20%, 42.35% and 33.45%, corresponding to EPS of 0.91, 1.29 and 1.72. At present, the company’s share price corresponds to 33 / 23 / 17 times of PE in 2021 / 2022 / 2023. Considering the good growth of spinal implant consumables track, the company’s spinal product R & D strength is leading and its core competitiveness is outstanding. It is expected to benefit from the process of import substitution and market concentration improvement at the same time. At the same time, the continuous widening of service boundary brings about the continuous enhancement of comprehensive strength and maintains the “buy” rating.
Risk warning events: risk of policy change, risk of product quality and potential liability, risk of long-term R & D and market development of trauma products failing to meet expectations, risk of delayed or delayed update of public data and information, impact of volume procurement on revenue exceeding expectations, etc.
