\u3000\u3 Guocheng Mining Co.Ltd(000688) 161 Shandong Weigao Orthopaedic Device Co.Ltd(688161) )
Event content: the company released its annual report for 2021: during the reporting period, the company realized an operating revenue of 2.152 billion yuan, a year-on-year increase of 18.08%; The net profit attributable to the parent company increased by 2.362 billion over the same period; The net profit deducted from non parent company was 678 million yuan, with a year-on-year increase of 25.79%.
The overall performance of the company in 2021 is relatively stable; Among them, the growth rate of revenue is slightly lower than our expectation, but the growth rate of net profit is slightly higher than our expectation. Compared with the company's financial performance in 2020, the growth rate of the company's performance fluctuates little; In 2021, the company's revenue increased by 23.62%, increased by about 2 percentage points (revenue increased by 15.87% in 2020), and the net profit attributable to the parent increased by 23.62%, decreased by about 3 percentage points (net profit attributable to the parent increased by 26.43% in 2020). Among them, the gross profit margin of the company's sales in 2021 was 81.17%, down 1.19 percentage points from 2020; The third rate is 44.05%, down 0.13 percentage points from 2020.
In the quarter, Q4 revenue growth continued to slow down, but due to the control of management expense rate and sales expense rate in the quarter, Q4 net profit growth was slightly higher than Q3. On a year-on-year basis in Q4, the company achieved a total operating revenue of 583 million yuan, with a year-on-year increase of 3.74% (10.56% in Q3 and 23.72% in Q2); The total net profit attributable to the parent company was 196 million yuan, with a year-on-year increase of 11.86% (the year-on-year growth rate of Q3 was 8.47%, and the year-on-year growth rate of Q2 was 21.32%). In the second half of 2021, the company's performance slowed down in the second half of the year after the influence of the base number of the previous year caused by the epidemic gradually weakened; In the fourth quarter, the disturbance of centralized purchase of high-value orthopaedic consumables of trauma and joints was further superimposed, and the revenue growth of the company slowed down again in the fourth quarter.
In the second half of 2021, the centralized purchase of high-value orthopaedic consumables was carried out successively. With the implementation of relevant centralized purchase in 2022, it is expected to have a significant impact on the company's performance. On August 27 and September 18, 2021, the results of the belt procurement of orthopedic trauma medical consumables alliance and the centralized belt procurement of artificial joints organized by the state were announced, and the average price of consumables decreased by more than 80%; The price and volume of the company's revenue side are expected to fluctuate significantly. In terms of the specific implementation of centralized mining, some provinces and cities of trauma intensive mining in 12 provinces and cities have been implemented since November 2021; The centralized procurement of national artificial joint belt is expected to be implemented successively from March to April 2022.
However, the disturbance of centralized purchase should not be exaggerated. The company is actively responding to the promotion of centralized purchase policy. On the one hand, it increases R & D, improves product competitiveness and accelerates iteration. On the other hand, the company has chosen strategies in centralized purchase bidding. The company actively welcomes the change of industry competition pattern brought by the promotion of centralized purchase policy; 1) The company increases R & D investment and continuously improves product competitiveness and product types; In 2021, the company's R & D expenditure was 120 million, a year-on-year increase of 47%, and the R & D expenditure rate increased to 5.63% (4.52% in 2020); In the same year, the company obtained the product registration certificate related to sports medicine, which is suitable for fixing bone tendon bone or soft tissue grafts in knee ligament reconstruction. 2) The company's strategy is to carry out centralized procurement and actively bid in subdivided fields with relatively weak market share; Judging from the results of the bid winning of trauma intensive procurement and artificial joint intensive procurement last year, the company has made strategic response in the centralized procurement bidding. Among them, the bid winning prices of locking sector products of trauma intensive procurement companies in 12 provinces and cities, intramedullary nails of their brand bond trauma products and Weigao starfish locking sector are relatively high; In the centralized procurement bidding of artificial joints with a market share of only 3.53% in China, all joint products of starfish medical and Beijing Yahua won the bid.
Investment suggestion: due to the possible impact of the implementation of centralized purchase, we slightly adjusted and reduced the company's performance, and predicted that the earnings per share from 2022 to 2024 would be 1.89 yuan, 2.23 yuan and 2.69 yuan respectively (previously predicted that the EPS from 2022 to 2023 would be 1.95 yuan and 2.32 yuan). At present, the company's valuation has returned to a relatively reasonable range, and the three product lines, including trauma and joint, have entered centralized mining, and the disturbance risk of centralized mining may also be released to a considerable extent; It is expected that as the market begins to view the normal promotion of centralized purchase policy more rationally, and considering that the company's growth logic brought by multiple paths such as industry expansion, import substitution and product iteration has not been destroyed, we tend to think that the company may gradually usher in repair opportunities and maintain the company's overweight-a proposal.
Risk tips: 1. The risk of price reduction exceeding expectations caused by the continuous promotion of volume procurement; 2. Risk of medical insurance policy adjustment; 3. Dependence on import of raw materials and related international trade risks.
