\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 39 Guangdong Hybribio Biotech Co.Ltd(300639) )
Key investment points
Business performance: the annual revenue and profit increased significantly, and the profitability continued to improve
Performance: in 2021, the company achieved a revenue of 2.673 billion yuan (YoY + 97.34%), a net profit attributable to the parent company of 852 million yuan (YoY + 134.97%), a net profit attributable to the parent company of 841 million yuan (YoY + 138.15%) after deduction, and a net cash flow from operating activities of 631 million yuan (YoY + 102.81%).
Profitability: in 2021, the gross profit margin of the company decreased by 5.74pct to 67.63%. In terms of business, the gross profit margin of testing revenue, self-produced products and purchased products decreased by 5.03, 1.34 and 2.47pct respectively. We expect that the decline of gross profit margin is mainly due to the decline of covid-19 testing terminal price compared with the average price in 2020. On the expense side, the company’s sales, management and R & D expense ratio in 2021 decreased by 8.80, 2.35 and 0.97pct respectively year-on-year. Overall, under the obvious influence of the decline of expense ratio during the period, the net interest rate increased by 3.97pct to 33.11% year-on-year, and the ROE (diluted share capital at the end of the period) increased by 11.51pct to 26.68%.
Future outlook: optimistic about long-term market expansion and brand improvement driven by two strategies
In terms of self-produced products, the company continues to promote the long-term strategy of “nucleic acid 99”, strengthen the R & D and innovation of nucleic acid detection products, and is optimistic about the continuous launch of new products under the continuous high R & D investment; In terms of testing services, the company has accelerated the construction and upgrading of third-party medical laboratories. At present, 30 medical laboratories have been put into operation, which is expected to reach 35 in 2022, and 16 testing companies have been established. Under the integrated operation advantage of “nucleic acid testing products + medical testing services”, the company is expected to achieve rapid development. From the perspective of covid-19 detection business, the current terminal price has been reduced for several rounds, and we expect that the possibility and range of further reduction may be limited in the future. Under the pressure of epidemic prevention and control brought by Omicron variant, nucleic acid detection, as the diagnostic basis of covid-19 detection, is expected to have strong support.
In addition, in the context of the national vigorous deployment of grass-roots nucleic acid detection capabilities, the company gave full play to its advantages in the construction, operation and management of nucleic acid laboratories, and timely launched the “Kaipu B53 nucleic acid remote strategic service scheme”, providing differentiated and comprehensive remote strategic services and overall solutions for the operation and management of PCR laboratories according to the actual conditions and needs of different hospitals. We are optimistic that this strategy will help accelerate the company’s market expansion and enhance its brand.
Profit forecast and valuation
We predict that the company’s EPS from 2022 to 2024 will be 3.83/4.38/4.74 yuan / share (the EPS in 2022 and 2023 are predicted to be 3.40/3.75 yuan / share respectively), and the corresponding PE of the current stock price will be 9x / 8x / 7X respectively, maintaining the “buy” rating.
Risk tips
The risk of new product promotion falling short of expectations, the risk of increasingly fierce market competition, the risk of decline in the number of nucleic acid testing service passengers, and the risk of policy change
