Shinva Medical Instrument Co.Ltd(600587) (600587)
Event: the company issued the restricted stock incentive plan (Draft) for 2021 and planned to grant a total of 6 million restricted shares to the incentive objects, accounting for about 1.48% of the company’s share capital at the time of announcement of the incentive plan (Draft). The grant price of restricted shares was 11.26 yuan / share.
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With a wide range of incentives and great efforts, the performance is expected to accelerate growth. The number of incentive objects to be granted in the incentive plan for the first time is 345, with a wide incentive range, including 1) directors and senior managers; 2) Middle management; 3) Key personnel; 4) Other personnel deemed by the board of directors to have made special contributions to the company. In terms of the number of grants, a total of 6 million restricted shares were granted to the incentive objects, with great incentive. The equity incentive plan is divided into three years from 2022 to 2024 to conduct performance evaluation and lift the restriction on sales: the company’s basic earnings per share from 2022 to 2024 shall not be less than 0.96/1.10/1.22 yuan respectively and not lower than the industry average level or the 75th percentile level of benchmarking enterprises; Based on 2020, the growth rate of the company’s net profit deducted from non parent company from 2022 to 2024 shall not be lower than 85% / 110% / 130% respectively, and not lower than the industry average level or the 75th percentile level of benchmarking enterprises. According to the performance appraisal target, the annual compound growth rate of the company’s net profit deducted from non parent company in 2021 and 2022 shall not be less than 36%; From 2021 to 2023, the compound annual growth rate of net profit deducted from non parent company shall not be less than 28%; From 2021 to 2024, the compound annual growth rate of net profit deducted from non attributable parent company shall not be less than 23%.
Focusing on medical device manufacturing and pharmaceutical equipment, the “14th five year plan” company set sail. In 2020, the major shareholder of the company was replaced by Shandong Guoxin Yiyang group, and Chairman Wang Yuquan took office. After that, the company changed the development policy of rapid expansion of all businesses during the 13th Five Year Plan period, and the 14th five year plan focused on the two core sectors of medical device manufacturing and pharmaceutical equipment. The revenue of the medical device manufacturing sector in 2021h1 was RMB 1.812 billion, with a year-on-year increase of 21.99%, accounting for 33.18% of the company’s revenue. The core businesses in the sector are infection control products and solutions, disinfection and sterilization products and solutions, surgical instruments and chemoradiotherapy equipment, in vitro diagnostic reagents and instruments, etc. The revenue of pharmaceutical equipment segment in 2021h1 was 458 million, a year-on-year increase of 16.87%, accounting for 9% of the company’s revenue. The main businesses in the segment are biopharmaceutical production equipment and solutions, injection production equipment and solutions, solid preparation production equipment and solutions, and traditional Chinese medicine preparation production equipment and solutions. With the promotion of new medical infrastructure across the country, the localization process of pharmaceutical equipment industry and the continuous high momentum of biopharmaceutical and CXO industries downstream of pharmaceutical machinery, the company’s two main industries of medical device pharmacy and pharmaceutical equipment will continue to develop rapidly, and the proportion in the company’s revenue will continue to increase.
Profit forecast, valuation and rating: as the leader of sensing and control equipment and pharmaceutical equipment, the company has a sound product system and has the ability of integrated solutions. It is expected to fully enjoy the dividends of the new medical infrastructure and the rapid development of the pharmaceutical equipment industry. We maintain the forecast that the company’s EPS from 2021 to 2023 will be 1.39/1.73/2.12 yuan, and the current price corresponding to PE will be 17 / 14 / 11 times. The equity incentive target shows the company’s confidence in rapid development and maintains the “buy” rating.
Risk tip: the company’s order is less than expected, the industry risk is intensified, and the investment in fixed assets is less than expected.
