since its listing in A-Shares in October 2018, the revenue growth and net profit growth of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) have never been less than 20%
The memory of the capital market is indeed relatively short.
I still remember a few months ago, the hot topic of market discussion was whether the valuation of popular tracks would be too high? Can we buy new energy and medicine? In the twinkling of an eye, after several waves of adjustment, we began to ask: can the new energy, semiconductor and pharmaceutical sectors still buy on bargain hunting?
On the first trading day of 2022, there was a “black door”. On January 4, A-Shares were in a volatile trend all day. The Shanghai index fell 0.2% to 3632.33 points, the Shenzhen composite index fell 0.44% to 14791.31 points, the market barely held on, and the gem index plunged directly, falling more than 2%.
Looking at the market, all kinds of track stocks fell sharply, with cro, chip, lithium battery, photovoltaic and other sectors leading the decline. Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) fell by more than 10%, Wuxi Apptec Co.Ltd(603259) fell by more than 8%, Contemporary Amperex Technology Co.Limited(300750) once fell by more than 4%, Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Xiamen Faratronic Co.Ltd(600563) fell by the limit, Chengxin Lithium Group Co.Ltd(002240) , Shenzhen Hopewind Electric Co.Ltd(603063) were close to the limit.
It’s not too much to say that there are sorrows everywhere in this scene.
But if you really mess about it, you don’t have to. why did you fall again?
Since December 2021, there has been more than one wave of shock in the whole market and the “big drop” of popular tracks, which makes Xiaosan feel anxious.
But the “old drivers” of A-Shares are not surprised.
If combined with the market trend in the past two years, it is not difficult to understand today’s sharp decline. After all, at the end of the year and the beginning of the year, it is an important time for institutions to adjust their positions.
Most of these stocks mentioned above are in the sectors leading the rise in the previous two years. For example, the share price of Contemporary Amperex Technology Co.Limited(300750) quadrupled in two years, once nearly six times, and Asymchem Laboratories (Tianjin) Co.Ltd(002821) more than tripled in two years, once nearly four times; Wuxi Apptec Co.Ltd(603259) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) have more than doubled in the past two years.
From the current stock prices of these stocks, after the surge in the early stage, it is inevitable that some “heights are too cold”.
But it’s really not necessary to say that there are any major effects or changes. As long as there is no major change in fundamentals, the correction of overvalued sectors is the most normal thing in the period of institutional position adjustment.
Speaking of this, let’s talk about the most familiar “value investment benchmark” – Kweichow Moutai Co.Ltd(600519) . At the beginning of 2014 Kweichow Moutai Co.Ltd(600519) , it was definitely a value depression, with less than 100 yuan per share and a total market value of only 110 billion yuan, compared with a net profit of 15.1 billion yuan in 2013, with a P / E ratio of 7.2 times.
However, when the A-share bull market started in 2015, Maotai’s share price immediately rose, and the share price soared 327.04% in three years (2015-2017).
After the rapid rise of the share price, Kweichow Moutai Co.Ltd(600519) share price entered the adjustment period when the fundamentals continued to improve. In 2018, the share price of Kweichow Moutai Co.Ltd(600519) fell by more than 14%, but the performance maintained a growth of 30%. Later, a series of facts proved that this adjustment is only the accumulation force for Kweichow Moutai Co.Ltd(600519) entering the next “take-off” of stock price.
The short adjustment after the sharp rise is only the digestion of the market “panic” caused by excessive growth. In the history of the A-share market, the adjustment period will not be very long as there is no obvious change or downward trend in the fundamentals of listed companies. Many enterprises have been consolidation for three or five months, or even a year, and the stock price rushed to another peak. gossip medicine stocks hit
Be completely indifferent to the fact that we must not hesitate to sell or “copy the old fellow”. How to adjust the synchronous warehouse adjustment? Which direction is good for bottom reading?
Since December last year, there have been many adjustments involved in the A-share market, and new energy, photovoltaic and medicine have basically been affected. Therefore, it is not easy for us to judge which stock or sector. Today, just pick the pharmaceutical stocks.
In recent years, the fluctuation of the pharmaceutical sector is obvious to all.
All along, as the representative of “just need”, the market of “drinking” and “taking medicine” has supported half of a shares. Especially after the “big water release” and “epidemic catalysis” in 2020, China Meheco Group Co.Ltd(600056) industry is booming.
However, by 2021, after the world entered the post epidemic era, the logic began to change. First, the potential performance risk caused by centralized purchase; Second, the performance outbreak during the epidemic is not necessarily sustainable, and the growth rate of enterprise performance will slow down; Third, the valuation of some sectors has been relatively high; In addition, due to the impact of multiple reasons such as macro political factors, the pharmaceutical sector has entered the adjustment stage.
But from the perspective of investment, the valuation has fallen, which is not a good time to copy the bottom! But as we mentioned earlier, how to “copy” this bottom is very important. should we copy the bottom of the pharmaceutical sector?
As an old saying goes, with high performance certainty and appropriate valuation, pharmaceutical stocks can still enter.
From the perspective of the industry, we should select the fields with high prosperity and less affected by centralized mining, such as pharmaceutical outsourcing services, chain leading enterprises, including services, pharmacies, medical beauty and other institutions, brand traditional Chinese medicine, vaccines, medical devices, etc.
For example, in the medical device sector, compared with other segments, the possibility of comprehensive centralized purchase of medical equipment is very small, but it has large industry space, large demand and high market prosperity.
Looking back on 2014-2020, China’s medical device market continued to expand, with an increase of 500 billion yuan in six years. In 2019, the scale of China’s medical device market was about 636.5 billion yuan, and in 2020, it was about 776.5 billion yuan, with a year-on-year increase of 22%. In terms of growth rate, the average annual growth rate is maintained at about 20%, far exceeding the growth rate of about 5% in the global market.
According to KPMG’s industry data, the sales of the medical device industry will reach nearly 800 billion US dollars by 2030. Among them, the Chinese market ranks second, accounting for more than 25% of the global market share, and the revenue will exceed US $200 billion.
However, at this stage, the concentration of China’s medical device industry is still low, and there is a long way to go. In China’s medical device industry, most small and medium-sized enterprises lack technological innovation and R & D capacity, and only rely on the assembly of imitation and purchased device parts. Only a few large and medium-sized enterprises have the production and R & D capacity of a complete industrial chain.
In the selection of individual stocks, we should still choose the old leading and characteristic enterprises, but we should also pay attention to the balance and collocation of valuation. It is suggested to select individual stocks with valuation repair in place and inflection point in operation.
In the development process of the Chinese market for more than 30 years, many high-quality enterprises have emerged, and there have been many overvaluations in the medical sector.
For example, the most typical absolute leader Jiangsu Hengrui Medicine Co.Ltd(600276) had a market value of more than 600 billion and a dynamic P / E ratio of more than 100 times, but its current valuation is close to halving; The current dynamic P / E ratio of cro leader Asymchem Laboratories (Tianjin) Co.Ltd(002821) is still as high as 113 times despite the sharp decline for many consecutive months; Wuxi Apptec Co.Ltd(603259) the current P / E ratio is also more than 77 times. In contrast, the dynamic P / E ratio of leading enterprises in the medical device industry Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) 52.2 times is not too high. why do I think Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) has great potential?
Although Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) has been controversial in the market during this period, it can be seen from two single day declines of more than 10% in half a year. Some believe that the valuation is high and some believe that the performance growth will slow down, but these concerns do not have a stable logical support, mainly speculation.
On the contrary, the author believes that, first of all, from a fundamental point of view, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) does not have the basis of “out of control” and long-term decline of stock price.
In the first three quarters of 2021, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) achieved a total revenue of 19.392 billion yuan, a year-on-year increase of 20.72%, and the net profit attributable to the parent company was 6.663 billion yuan, a year-on-year increase of 24.23%; In the third quarter, the revenue in a single quarter was RMB 6.613 billion, a year-on-year increase of 20.25%, and the net profit attributable to the parent company was RMB 2.318 billion, a year-on-year increase of 21.41%.
Since its listing in A-Shares in October 2018, the revenue growth and net profit growth of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) have never been less than 20%.
In recent years, the return on net assets dilution of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) has continued to be more than 25%, while the net profit margin on sales has continued to increase, reaching 34.37% in the third quarterly report of 2021.
Moreover, judging from the information transmitted within the company, the management is also full of confidence in the performance of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) in the fourth quarter of 2021.
According to the latest research records of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , senior executives introduced that since the fourth quarter of 2020, the international epidemic has normalized, and epidemic related orders began to fall quarter by quarter. Therefore, the high base pressure in the international market in the same period of 2021 has been basically relieved, and the growth rate of the international market is expected to pick up in the fourth quarter of 2021.
At the same time, since the company achieved a breakthrough of 700 blank high-end customers in the international market in 2020, exceeding the sum of the breakthroughs of high-end customers over the years, the company’s brand influence worldwide has been unprecedentedly improved. In the first half of 2021, the company further achieved a breakthrough in collaborative sales of 400 blank high-end customers and 300 high-end customers respectively, In the future, the growth of the international market will step into a new level.
Secondly, from the ceiling position, China is the parent market of Mindray and the most dynamic basic medical market in the world. But in terms of volume, the Chinese market is only the tip of the iceberg.
China’s medical device market has a total scale of more than 400 billion yuan, but the global medical device market has a scale of more than 400 billion US dollars. Based on Mindray’s revenue of 19.392 billion yuan in the third quarter of 2021, even if it reaches the generally estimated annual revenue of 25-26 billion yuan, it is still less than 10% of the scale of China’s local market. Compared with the world, it has a wider space.
Finally, from the perspective of valuation level, wind data shows that as of January 4, the average PE of medical and health care equipment industry was 27.68 and pb10.68 17, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) as a leader must be higher than the industry average. However, considering that Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) has shown good growth in revenue and profit in recent years, and its complete product system, reasonable business layout and strong R & D and innovation ability, Mindray’s valuation is not high in the long run.
In particular, the addition of new products such as orthopedics and endoscopy will bring continuous revenue and profit increase to Mindray. Meanwhile, the transaction of Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) acquiring 100% equity of hytest invest oy (hereinafter referred to as “haipeptide biology”) and its subsidiaries has been successfully completed.
After the completion of the delivery, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) Mindray Netherlands, a wholly-owned subsidiary, has directly or indirectly held 100% equity of haipeptide biology and its subsidiaries, filling many gaps in China’s top raw materials upstream of in vitro diagnosis, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) will also strengthen the self-development and self-production capacity of core raw materials and improve the proportion of self-made core raw materials.
Self made raw materials can ensure stable quality, safe supply and cost optimization, and help solve the problem of “neck sticking” in the supply of upstream raw materials for in vitro diagnosis.
(times Finance)
