\u3000\u3 Guocheng Mining Co.Ltd(000688) 617 Apt Medical Inc(688617) )
Events
On March 10, 2022, Apt Medical Inc(688617) released the annual report of 2021:
In 2021, the company achieved an operating revenue of 829 million yuan, a year-on-year increase of 73%, a net profit attributable to the parent of 208 million yuan, a year-on-year increase of 88%, a net profit deducted from non attributable to the parent of 168 million yuan, a year-on-year increase of 71%, and a basic earnings per share of 3.19 yuan.
On March 9, 2022, the company announced the main business data from January to February of 2022: from January to February of 2022, the operating revenue was about 156 million yuan, an increase of about 70% year-on-year.
Brief comment
The three major product lines have achieved high growth, and the performance is in line with market expectations
The company’s performance in 2021 was brilliant. The revenue, net profit attributable to parent company and net profit deducted from non parent company were 829 million yuan (+ 73%), 208 million yuan (+ 88%) and 168 million yuan (+ 71%) respectively. In a single quarter, the revenue and net profit attributable to parent company in 21q4 were 235 million yuan (+ 50%) and 46 million yuan (+ 17%) respectively. The growth rate of profit side was lower than that of revenue side, It is expected that it is mainly due to the large investment in Q4 sales and R & D expenses. From the operation from January to February 2022, the company’s performance maintained a high growth trend.
The three major businesses of the company maintained a high growth trend. The revenue of coronary access products, electrophysiological products and peripheral intervention products reached 382 million yuan, 233 million yuan and 119 million yuan respectively, with a year-on-year increase of 97%, 46% and 81% respectively. It is expected that it is mainly due to the synchronous improvement of vascular intervention product coverage and admission penetration rate and the gradual breakthrough of electrophysiological business from two-dimensional to three-dimensional. The company’s balloon products benefited from the intensive collection volume. At the same time, the coronary artery guide wire and guide tube achieved a higher level in the intensive collection of 13 provincial alliances in Inner Mongolia and 9 provincial alliances in Jiangxi in 2021, which is expected to drive the high growth of the company’s coronary artery access business.
From a regional perspective, after the gradual recovery of the epidemic, China has increased significantly, achieving a revenue of 744 million yuan (+ 77%), and overseas business has still achieved steady growth under the influence of the epidemic, achieving a revenue of 79 million yuan (+ 35%). In 2022, China will continue to promote product registration in overseas markets such as Mexico, Brazil and the CIS region of Russia, Among them, the Eurasian union registration in the CIS region of Russia will be launched. It is expected to complete the registration of 6-9 types of products throughout the year. At the same time, it will also complete the CE registration of 4 peripheral vascular products and the fda510 (k) application of 3 PCI intervention products. The large volume of products in the overseas market can be expected.
We deepened market development and further increased the market coverage of the company’s electrophysiological and vascular intervention products
In 2021, the company’s electrophysiological products were implanted in nearly 300 new hospitals, covering more than 800 hospitals, which has achieved a breakthrough from two-dimensional to three-dimensional. After the approval of three-dimensional cardiac electrophysiological mapping system and related ablation catheters in early 2021, more than 600 three-dimensional electrophysiological operations have been completed in nearly 200 hospitals. In the future, with the further investment of three-dimensional electrophysiological equipment and the approval of atrial fibrillation consumables, It is expected to continuously improve the hospital coverage and the amount of electrophysiological surgery. The coverage rate and admission penetration rate of vascular intervention products have also been further improved, with more than 250 new agents, including nearly 60 coronary product lines and more than 190 peripheral product lines. The number of hospitalizations increased by 54% year-on-year, covering more than 2000 hospitals.
The approval of products is progressing smoothly, there are abundant products under research, and a variety of heavy products may become an important force in the future
In terms of product R & D, the company adheres to independent R & D, guided by meeting clinical applications, and steadily promotes the steady progress of various R & D projects through the mode of “combination of medicine and industry”. Since the beginning of the year, 10 products independently developed by the company, including magnetic positioning cold saline perfusion radiofrequency ablation electrode catheter, three-dimensional cardiac electrophysiological mapping system, anchored balloon dilation catheter and hydrophilic coated contrast catheter, have been approved for listing, further enriching the company’s business product lines in electrophysiology, peripheral and so on. In addition, the company also has 21 research projects, including 10 in the field of electrophysiology and 11 in the field of vascular intervention. In 2022, the company will focus on promoting the clinical projects of atrial fibrillation and PFA with magnetic positioning pressure and high-density mapping, and complete the clinical follow-up of TAA. We believe that magnetic positioning pressure sensing radiofrequency ablation catheter, pulse ablation generator (PFA), thoracic aortic stent (TAA) Heavy products such as balloon microcatheter are expected to become important revenue contribution growth points in the future, especially the layout of consumables related to atrial fibrillation, which is expected to further enhance the core competitiveness of the company’s electrophysiological business.
During this period, the cost rate was well controlled and the R & D investment continued to increase
The gross profit margin of the company’s sales in 2021 was 69.49%, basically the same as that of the same period last year; The sales expense ratio is 23.69% (-0.04pct); The management fee rate is 6.65% (- 1.60pct); The financial expense rate is 0.08% (+ 0.04pct). During the reporting period, the company actively invested in R & D, with a R & D expense rate of 16.28%, a year-on-year increase of 1.28pct, mainly due to the increase of R & D projects, the salary of R & D personnel and the increase of experimental fees and inspection and testing fees required for some projects entering the clinical stage. The company expects to continue to increase R & D investment in 2022, and the R & D expense rate is expected to be 16.7%. The net operating cash flow of the company was 181 million yuan, with a year-on-year increase of 22.36%, which is expected to be mainly due to the growth of the company’s sales scale, the rapid collection of funds and the increase in cash received from the sale of goods.
Profit forecast and valuation
We estimate that the company’s operating revenue from 2022 to 2024 will be 1.188 billion yuan, 1.654 billion yuan and 2.237 billion yuan respectively, with a year-on-year increase of 43%, 40% and 35%. The net profit attributable to the parent company is expected to be 298 million yuan, 411 million yuan and 553 million yuan respectively, with a year-on-year increase of 43%, 38% and 35%. The EPS from 2022 to 2024 is expected to be 4.47 yuan, 6.16 yuan and 8.30 yuan respectively, calculated at the closing price on March 10, 2022 (207.07 yuan), The corresponding PE is 46, 34 and 25 times respectively.
Risk tips: failure risk of new product R & D and registration, brain drain risk of R & D and management, market competition risk and centralized purchase policy risk.
