\u3000\u3 China Vanke Co.Ltd(000002) 901 Double Medical Technology Inc(002901) )
Key investment points
Event: in 2021, the company achieved a revenue of 1.994 billion yuan, a year-on-year increase of 25.68%; The net profit attributable to the parent company was 673 million yuan, a year-on-year increase of 11.17%; Net profit deducted from non parent company was 616 million yuan, with a year-on-year increase of 11.48%. In Q4 alone, the company achieved a revenue of 689 million yuan, a year-on-year increase of 44.54%, and a net profit attributable to the parent company of 220 million yuan, a year-on-year increase of 23.44%.
Spine orthopedic products grew rapidly and other product lines developed steadily: from the perspective of business, the company’s trauma products achieved a revenue of 1.128 billion yuan in 2021, a year-on-year increase of 14.97%; The revenue of spine products was 565 million yuan, a year-on-year increase of 53.14%; The revenue of minimally invasive surgical products was 150 million yuan, a year-on-year increase of 34.20%; The revenue of neurosurgical products was 43.82 million yuan, a year-on-year increase of 14.93%.
Pay attention to R & D investment, and the product line is expected to be continuously enriched: in 2021, the company invested 167 million yuan (+ 30.50%), and the number of R & D teams exceeded 500. Up to now, the company has 255 batches of registration certificates in the application, covering the fields of trauma, spine, minimally invasive surgery, neurosurgery, dentistry, joint, sports medicine and so on, and the product line is expected to be continuously enriched. In terms of spine product line, the company acquired 51% equity of Beijing ande thinking Technology Co., Ltd., an enterprise of intervertebral foraminal mirror equipment and supporting equipment consumables, to accelerate the development, promotion and application of the company’s product portfolio in the field of spinal minimally invasive surgery; In terms of joint product line, the company has successively obtained the third category of national medical device registration certificates such as hip prosthesis (high crosslinking), ceramic lining and ceramic ball joint.
The scope of orthopaedic centralized procurement is expanded, and opportunities and challenges coexist: on July 20, 2021, the procurement of orthopaedic trauma medical consumables alliance led by Henan Province was gradually launched. A total of 20751 orthopaedic trauma products were proposed to be selected this time. The company ranked among the top in the clinical demand of three procurement packages: ordinary sector system, locking compression sector system and intramedullary nail system, and all three procurement packages won the bid. On September 14, 2021, the company won the bid for the procurement of hip joint product system and knee joint product system in artificial joint countries. The promotion of centralized purchase of orthopaedic consumables is conducive to the long-term and healthy development of orthopaedic consumables industry and the market standardization and large-scale transformation.
Profit forecast and investment rating: considering the impact of the epidemic and centralized mining, we adjusted the net profit attributable to the parent company from 938 / 1175 million yuan to 837 / 1028 million yuan in 20222023. It is estimated that the net profit attributable to the parent company in 2024 will be 1.246 billion yuan, corresponding to 21 / 17 / 14 times of PE in 20222024, maintaining the “buy in” rating.
Risk tips: market competition risk, new business development risk, large price reduction risk of centralized procurement, covid-19 epidemic and other force majeure risks.
