\u3000\u30 Chongqing Baiya Sanitary Products Co.Ltd(003006) 39 Guangdong Hybribio Biotech Co.Ltd(300639) )
Key investment points
Event: on March 25, 2022, the company released its annual report for 2021. In 2021, the company realized an operating revenue of 2.673 billion yuan, a year-on-year increase of 97.34%; The net profit attributable to the parent company was 852 million yuan, a year-on-year increase of 134.97%; The net profit deducted from non parent company was 841 million yuan, with a year-on-year increase of 138.15%, and continued to maintain rapid growth.
The performance met expectations, and covid-19 nucleic acid detection continued to contribute to the performance. In 2021, the company achieved a revenue of 1.643 billion yuan from third-party medical laboratory testing services, with a year-on-year increase of 197.54%; The revenue of diagnostic reagents and instrument products was 1.030 billion yuan, a year-on-year increase of 28.39%, of which the sales revenue of self-produced products was 859 million yuan, a year-on-year increase of 27.45%, and the revenue of purchased products was 171 million yuan, a year-on-year increase of 33.34%
Covid-19 detects that the decline of price affects the overall gross profit margin, and the performance growth drives the rapid increase of net profit margin. In 2021, the company’s medical testing service revenue accounted for 61% of its main business revenue. The rapid growth of ICL business mainly came from the explosion of covid-19 nucleic acid detection demand. In 2021, the mainland nucleic acid detection price naturally decreased due to procurement policies, market competition and other reasons, resulting in the reduction of the company’s overall gross profit margin; With the continuous expansion of the company’s business scale, the dilution effect became more and more obvious, and the net interest rate increased significantly. In 2021, the company’s sales expense ratio was 14.32%, a year-on-year decrease of 8.80pp, the management expense ratio was 11.76%, a year-on-year decrease of 3.32pp, and the financial expense ratio was 0.14%, a year-on-year increase of 0.35pp; The R & D expense ratio was 4.31%, with a year-on-year decrease of 0.97pp; The gross profit margin of the company was 67.63%, a year-on-year decrease of 5.73pp, and the net profit margin was 31.88%, a year-on-year increase of 2.74%.
Nucleic acid screening drives the high growth of ICL business and the rapid layout of medical laboratory construction. 1. In terms of routine testing, the company has continued to increase investment in the construction of third-party laboratories in recent years. At present, 30 medical laboratories are in normal operation and are expected to increase to 35 in 2022. With the construction and upgrading of the company’s regional laboratories, ICL testing capacity and regional coverage will be further improved. The routine testing service business is expected to achieve rapid growth with the opportunity of covid-19. 2. In terms of covid-19 detection, the epidemic situation in China continued to be tense in 2021, with frequent regional outbreaks. The company actively responded to the needs of national prevention and control, undertook large-scale covid-19 screening tasks in Hong Kong, Liaoning, Guangdong, Shaanxi, Henan, Shanghai and other places in China, and completed covid-19 detection for about 50 million people in 21 years. Considering that covid-19 epidemic is still in the stage of intense prevention and control, and the number of confirmed cases in China is still rising, We expect that covid-19 testing business will continue to contribute to stable cash flow in the short term.
Nucleic acid detection products have recovered significantly, with the rapid development of national nucleic acid laboratory infrastructure. The company has a wide range of molecular diagnostic products, covering maternal and child health, reproductive infection and other fields. Core products such as HPV and STD have significant competitive advantages, and the performance will grow rapidly in 2021. During the covid-19 epidemic, the number of nucleic acid laboratories in China increased significantly, and the molecular diagnosis industry ushered in a new round of development opportunities. As of February 19, 2022, 12277 medical and health institutions in China could carry out covid-19 virus nucleic acid detection; The company gives full play to the advantages of its nucleic acid detection products and is expected to further strengthen its market competitiveness with the help of this policy opportunity in the future.
R & D investment increased by more than 52%, and it is expected to usher in a number of new products in 22 years. The company attaches great importance to technological innovation and maintains the layout of innovative products around molecular diagnosis. In 2021, the R & D investment was about 125 million yuan, with a year-on-year increase of 52.39%. During this period, more than 30 R & D projects were newly established. It is expected that many products such as tumors, birth defects and individualized drugs will be approved in 2022. At the same time, the company also continued to introduce high-end technology and established research and development platforms such as ngs, digital PCR, time-of-flight mass spectrometry and tandem mass spectrometry, laying a good foundation for medium and long-term business development.
Profit forecast and investment suggestions: according to the annual report data and the development of covid-19 nucleic acid detection in Q1 China, the annual nucleic acid detection volume in 2022 is increased. It is estimated that the company’s revenue from 2022 to 2024 will be RMB 3.358, 2.835 billion (RMB 1.843 and 2.231 billion before adjustment), with a year-on-year increase of 26%, – 16% and 9%, and the net profit attributable to the parent company will be RMB 956, 665 and 727 million (RMB 511 and 640 million before adjustment), with a year-on-year increase of 12%, – 30% and 9%, The corresponding EPS is 3.25, 2.26 and 2.47. Considering that covid-19 epidemic brings great development opportunities to the company’s nucleic acid testing products and services, non covid-19 business is expected to continue to grow rapidly, long-term market influence is expected to continue to improve, and maintain the “buy” rating.
Risk warning events: the risk of new product research and development, the risk of policy change, the risk of intensified market competition, the risk of continuous uncertainty of covid-19 epidemic, and the risk of delayed information or delayed update of the public data used in the research report.