\u3000\u3 Guocheng Mining Co.Ltd(000688) 366 Shanghai Haohai Biological Technology Co.Ltd(688366) )
[key points of investment]
All product lines of the company have achieved substantial growth. In 2021, the company achieved an operating revenue of 1.767 billion yuan, with a year-on-year increase of 32.61%; The net profit attributable to the parent company was 352 million yuan, a year-on-year increase of + 53.10%; The net profit deducted from non parent company was 328 million yuan, a year-on-year increase of + 58.88%. With the effective control of covid-19 epidemic in China, all product lines of the company have achieved significant growth. Among them, ophthalmology, medical aesthetics and wound care, orthopedics, anti adhesion and hemostasis were + 19.24%, + 91.49%, + 21.23% and + 11.94% respectively. In terms of Ophthalmology business, the company has covered cataract treatment, myopia prevention and control, refractive correction and ocular surface medication, and has arranged a number of products under research in the field of fundus disease treatment; In terms of medical beauty, the company has formed a complete medical beauty product matrix of four categories: dermal filler, botulinum toxin, RF and laser equipment. The recognition of the third-generation hyaluronic acid “Haimei” has driven the large volume of hyaluronic acid products. In addition, ouhuameike has contributed 94.88 million yuan in revenue, which has promoted the significant increase of the sector.
Focus on expanding the innovative product line of Ophthalmology and medical aesthetics. In 2021, the company’s R & D expenditure was 168 million yuan, a year-on-year increase of 32.51%, accounting for 9.48% of operating revenue (9.49% in 2020 and 7.24% in 2019 respectively). Among them, clinical trials such as orthokeratology, hydrophobic mode aspheric intraocular lens, retinal hole sealing biological gel and so on have been continuously invested. Meanwhile, the new method of aspheric aspheric intraocular lens correction with the method of hydrophobic mode astigmatism has entered the clinical trial stage. In addition, the biological, physical and chemical experiments and clinical trials of the fourth generation organic cross-linked hyaluronic acid products, painless cross-linked hyaluronic acid products and Shuiguang injection are also ongoing.
The gross profit margin of the company has declined. In 2021, the overall gross profit margin of the company’s main business was 72.13%, a decrease of 2.78 percentage points compared with 2020. The main reasons are as follows: 1) the fair value of the book inventory of ouhuameike and its subsidiaries is remeasured, and the gross profit margin of its sales in the company’s consolidated statements is zero, which reduces the overall gross profit margin by about 1.26%; 2) The sales price of some models of intraocular lens product line decreased in the area with volume procurement; 3) The sales price of Yimei “Haiwei” hyaluronic acid products has been steadily reduced to highlight the product positioning of “national hyaluronic acid”.
[investment suggestions]
During the reporting period, the company acquired Hengtai vision and NANPENG optics, and obtained the exclusive distribution rights of OK mirror products “myok MaiErKang” and “Hengtai hiline”; Acquire Hebei Xinshikang and expand the soft contact lens market; Acquire and invest in ouhuameike and eirion, and expand the fields of medical and American photoelectric equipment and botulinum toxin. The company has continuously improved the layout of Ophthalmology, medicine and beauty, and realized the whole industrial chain layout of Ophthalmology, medicine and beauty. With the promotion of integration and the enhancement of synergy, we are optimistic about the future growth trend of the company. In addition, the company issued the 2021 A-share restricted stock incentive plan, which granted 204 incentive objects for the first time, including directors, senior executives and core technicians of the company and its subsidiaries (accounting for more than 10% of the total number of the company).
The company’s revenue growth basically meets our expectations, and the growth of net profit attributable to the parent company is lower than our expectations. We slightly reduced the growth rate and gross profit margin of the ophthalmology sector, increased the sales expense rate, slightly reduced the company’s operating revenue in 2022, 2023 and 2024 to RMB 1.998/2.263/2.566 billion respectively, the net profit attributable to the parent company was RMB 451/5.33/628 million respectively, the EPS was RMB 2.56/3.03/3.57 respectively, and the corresponding PE was 38 / 32 / 27 times respectively. Maintain the “overweight” rating.
[risk tips]
Market competition intensifies risks;
Risk of industrial policy change;
M & A integration fails to meet expectations;
