Well Lead Medical Co.Ltd(603309) (603309)
Event overview
The company plans to acquire 51.4743% equity of Suzhou medxun Medical Technology Co., Ltd. (hereinafter referred to as “medxun”) with its own funds of 30.4946 million yuan. After the completion of this transaction, the direct and indirect equity of medxun held by the company will increase to 65.9269%, and medxun will become a holding subsidiary of the company.
The target company focuses on pain and infusion management, and the product quality is recognized
The target company, Madison, was established in June 2014. Its main business is to develop and produce pain management products such as portable infusion pumps and disposable liquid storage boxes. In the first three quarters of 2021, it achieved a revenue of 4.6491 million yuan, It has exceeded the annual revenue of last year (3.0535 million yuan) and narrowed the loss. According to the information on the company’s official website, its 3000 series intelligent portable pump is the medical equipment exclusively selected in the catalogue of excellent domestic medical equipment organized by the health commission in the industry. It is also the first electronic analgesic pump in the industry to obtain CE certification. In addition, it has also passed the product availability test and According to the product function safety test, the product quality is guaranteed.
The potential market of portable analgesic pump is huge, and the double expansion space outside China is broad
The intelligent analgesia pump can be used in acute and chronic pain fields such as postoperative pain, painless delivery and cancer analgesia. The sales model is “pump head + disposable liquid storage box”. In 2018, the development rate of anesthesia delivery analgesia in China was 16.45%, Corresponding to the demand for about 2.5 million disposable analgesic pump storage boxes (15.23 million newborns in 2018), there is more than four times the development space for the penetration rate of more than 80% in the European and American market; in the field of postoperative pain, combined with the number of operations of inpatients (69 million in 2019), the rate of postoperative patient analgesia management (32.6% in the survey of Guangzhou No. 12 hospital in 2016), and single person consumption (assuming that each person needs 2 consumables), the demand is about 45 million, which is superimposed on the demand in cancer analgesia, tumor chemotherapy and other fields and the improvement of potential penetration. The market is huge. Medxun analgesic pump will open a two-way expansion mode outside China with nmpa and CE certification, with broad space.
Enrich the categories of anesthesia line products, and increase the performance of rapid and large-scale channel coordination
As a leading medical catheter enterprise in China, the company has channel layout in more than 90 countries or regions around the world, covering more than 3000 hospitals in China, including more than 1000 third class hospitals. Anesthesia line has always been a strong plate of the company, and its main products focus on airway management in the field of general anesthesia, such as endotracheal intubation and laryngeal mask, In recent years, Weili Jianyi has carried out branch sales and built a direct sales team of more than 100 people to strengthen academic promotion, and the stickiness with terminal hospitals has been continuously strengthened. This time, we will further increase the capital and shares of medxun. While enriching the company’s anesthesia product line, we will quickly promote medxun intelligent analgesic pump and disposable liquid storage box to overseas and Chinese terminal markets with the original channel advantages, We expect that from 2021 to 2023, the company’s disposable analgesic pump storage box will achieve a total sales revenue of 10 million, 30 million and 45 million yuan outside China.
Investment advice
Comprehensive and positive changes have taken place in the company’s fundamentals. The adjustment of sales structure has driven the domestic sales force and the large-scale listing of heavy and innovative high gross margin varieties, driving the company to usher in a period of rapid performance growth in 2022. We maintain the profit forecast. It is expected that the company’s operating revenue will be RMB 1.059/13.18/1.659 billion from 2021 to 2023, with a year-on-year increase of – 6.34% / 24.46% / 25.86% respectively, The net profit attributable to the parent company is RMB 115 / 156 / 202 million, corresponding to earnings per share of RMB 0.44/0.60/0.78 respectively. When corresponding to the closing price of RMB 14.67 on December 10, 2021, PE is 33 / 25 / 19 times respectively, maintaining the “buy” rating.
Risk statement
Sales are less than expected, new product R & D risk, centralized purchase is more than expected risk, equity transfer risk, acquisition integration risk, target company performance risk and goodwill impairment risk.
