\u3000\u3 China Vanke Co.Ltd(000002) 777 Sichuan Jiuyuan Yinhai Software Co.Ltd(002777) )
Key investment points
Event: the company released its annual report for 2021, realizing an operating revenue of 1.31 billion yuan, a year-on-year increase of 13.2%; The net profit attributable to the parent company was 220 million yuan, a year-on-year increase of 17.1%. In the fourth quarter alone, the operating revenue was 680 million yuan, a year-on-year increase of 3.2%, and the net profit attributable to the parent company was 97 million yuan, a year-on-year decrease of 0.6%. The epidemic repeatedly affected the delivery of some projects, but the annual performance remained steady growth.
Medical insurance continued to grow at a high rate and its profitability improved significantly. In terms of business segments: 1) medical insurance: the revenue was about 600 million yuan, a year-on-year increase of 25.0%. In terms of medical insurance it, during the reporting period, it won the bid for the construction project of medical insurance information platform in 8 provinces (autonomous regions) such as Hubei and Sichuan, participated in the construction project of national medical security information platform in 22 provinces, and realized the online implementation of core business systems in more than 100 cities and the system upgrading of 160000 designated medical institutions within the specified time; In terms of medical it, the smart hospital project of 10 class III hospitals and 15 class II hospitals was successfully launched in 2021, providing cloud his services for more than 60 grass-roots medical institutions and providing standardized and agile medical insurance interface docking and transformation services for more than 1000 hospitals. 2) Digital government and smart city: the revenue was 640 million yuan, with a year-on-year increase of 2.6%. During the reporting period, the company continued to give full play to the advantages of core manufacturers in the human resources and social security industry, successively won the bid and launched a number of national, provincial and municipal platform projects, and comprehensively promoted the information transformation in the field of people’s livelihood. In addition, based on more than 20 years of deep cultivation, the company further improved its platform reuse development ability, increased the proportion of software business to 51.6%, driven the comprehensive gross profit margin to 56.1%, increased by 2.86pp year-on-year, and further strengthened its profitability.
The policy continues to catalyze, and the medical it boom is rising. In 2021, the state intensively issued relevant policies such as the “14th five year plan” to promote national government informatization, the three-year action plan for DRG / Dip payment mode reform, and the action on promoting the high-quality development of public hospitals (20212025), many of which put forward quantitative objectives for the follow-up construction of medical informatization, For example, according to the requirements of the National Health Commission, the average application level of electronic medical records in national secondary and tertiary public hospitals will reach level 3 and level 4 respectively in 2022. Under the background of digital economy strategy, the industry is expected to usher in a boom inflection point after experiencing the trough period in 2020. The informatization in the field of people’s livelihood represented by medical it may enter a new round of intensive construction cycle.
There are plenty of orders in hand, which is optimistic about the acceleration of follow-up performance. As of December 31, 2021, the amount of accounts receivable of the company had reached 420 million yuan, with a year-on-year increase of 24.0%. The contract liabilities remained at a high level of 550 million yuan, and there were abundant orders on hand. At the same time, in February 2022, the company issued the announcement of winning the bid for the information construction software project of five hospitals in Taiyuan, with a total amount of more than 100 million yuan, and further national expansion. We believe that the winning of the large-scale project has further verified the company’s core competitiveness in the medical insurance it field, thus driving the rapid growth of product orders of the overall medical insurance business, which is expected to continue to benefit from the pace of DRG / Dip payment reform and other construction.
Profit forecast and investment suggestions. It is estimated that the compound growth rate of the company’s net profit attributable to the parent company will reach 27.1% from 2022 to 2024. The digital transformation in the fields of health care, government affairs and other people’s livelihood is an important development theme during the 14th Five Year Plan period. Policies are intensively implemented, and the industry has ushered in an inflection point of prosperity; As the leading manufacturer of China’s people’s livelihood informatization, the company has outstanding competitive advantages in medical insurance related systems, and the national expansion is progressing smoothly, which is expected to accelerate the growth of orders. Therefore, the company is given 30 times PE in 2022, corresponding to the target price of 27.00 yuan, and the “buy” rating is given for the first time.
Risk tip: the policy promotion is not as strong as expected, the endogenous reform power of the hospital is insufficient, the epidemic repeatedly affects the delivery, and the industry competition intensifies.
