\u3000\u3 Shengda Resources Co.Ltd(000603) 309 Well Lead Medical Co.Ltd(603309) )
Event: the three types of registration certificate of disposable BiP catheter of batiguardab, Sweden, which is the sole agent of the company, was renewed and approved
According to the announcement of the company, the registration certificate of three types of medical devices for disposable sterile catheter (BIP catheter) of Swedish batiguardab, which is the sole agent of the company, was continuously approved. In June 2018, the company signed an agreement with batiguardab to obtain batiguard ® The 10-year exclusive use right of coating technology in China and the exclusive distribution right of BiP catheter in China. Due to the epidemic and other reasons, the renewal of the original registration certificate after the expiration of December 6, 2020 has been postponed. The re certification of BiP catheter will further enhance the company’s competitive advantage in the field of catheterization and promote the upgrading of the company’s catheterization products. We assume that the ex factory price of BiP alloy coated catheter is 75 yuan / piece and the gross profit margin is 60%, From 2022 to 2024, the sales volume will be 45, 75 and 1 million pieces respectively. In the next three years, it will contribute 33.75, 56.25 and 75 million yuan of sales revenue to the company, which is expected to have a positive impact on the company.
BiP catheter has the characteristics of long-term indwelling and reducing urinary tract infection rate. It is widely used in the international market and drives the expansion of market demand in China
Batiguard unique to BiP catheter ® The coating (alloy coating composed of gold, silver and palladium) prevents the adhesion and colonization of bacteria by releasing micro current, which can reduce the adhesion and growth of bacteria and block the infection pathway. Compared with the urinary catheter used for conventional 3-day indwelling, the indwelling time in the body is greatly prolonged (up to 30 days) ® Coatings have been used in medical devices for more than 20 years ® Coated catheters have been widely used in the United States and Europe, with a total sales of more than 100 million in the United States, Europe, Japan, China and other places. Driven by the immediate anti infection needs of patients undergoing long-term indwelling and critical surgery, the potential space of BiP catheter is huge. Up to now, BiP catheter is the only antibacterial catheter in China that has obtained the registration certificate of three types of medical devices, which is expected to drive the expansion of clinical demand by virtue of safety, effectiveness and convenience.
With the rapid and large-scale reform of domestic sales, the key customer model in the export market has cooperated for many years, and the registered certificates are diverse. Foreign trade also has the potential for sustainable development
We believe that Well Lead Medical Co.Ltd(603309) is an inflection point company with great cost performance and potential at this stage. While the domestic market is sold separately and the high gross profit innovative products are sold in large quantities, the export market also has development potential. Since its establishment, the company has continued to explore internationalization. In 2004, it entered the strictly regulated American market, and then successively obtained the certification of mainstream markets such as Canada, Japan and South Korea MEDLINE and other large international enterprises have cooperated for many years, with a single product scale of about billion yuan and product quality recognized. In recent years, due to the acceleration of the Chinese market, the overseas proportion has declined, but maintained a positive growth level (except for the impact of the epidemic). By the end of 2020, the company has 17 FDA (510k) registrations and 72 CE certificates. Therefore, we believe that the company has the development potential of the overseas market. If the company accelerates the improvement and construction of the export team, the development of the overseas market can be expected.
Profit forecast
Considering the overall positive changes in the company’s fundamentals, the adjustment of sales structure drives the strength of domestic sales and the large-scale listing of heavy and innovative high gross margin varieties. At the same time, the export market has the potential for sustainable development. Combined with equity incentive, we expect the company’s performance to continue to grow rapidly (after removing the mask) and maintain the early profit forecast, that is, the company’s operating revenue in 21-23 years will be 1.059/1.318/1.659 billion yuan, with a year-on-year increase of – 6.34% respectively 24.46% and 25.86%, the net profit attributable to the parent company was RMB 115 / 156 / 202 million respectively, and the earnings per share were RMB 0.39/0.53/0.69 respectively (EPS change caused by the change of share capital). Corresponding to the closing price of RMB 13.97 on March 17, 2022, PE was 36 / 26 / 20 times respectively, maintaining the “buy” rating.
Risk tips
The risk of overseas sales falling short of expectations, the risk of new product R & D, the risk of product quality, the risk of centralized purchase exceeding expectations, and the risk of sales expansion falling short of expectations.
