\u3000\u3 Guocheng Mining Co.Ltd(000688) 358 Chison Medical Technologies Co.Ltd(688358) )
Event: on the evening of April 18, 2022, the company released its annual report for 2021: the company achieved an annual operating revenue of 398million yuan, a year-on-year increase of 19.43%; The net profit attributable to the parent company was 112 million yuan, a year-on-year increase of 12.88%; Deducting non net profit of 78 million yuan, a year-on-year decrease of 13.95%. The basic earnings per share is 1.41 yuan, and it is proposed to distribute a cash dividend of 5 yuan (including tax) for every 10 shares to all shareholders.
Among them, the operating revenue in the fourth quarter of 2021 was 109 million yuan, a year-on-year decrease of 4.53% (we expect it to be mainly affected by the order confirmation cycle and exchange rate fluctuations); The net profit attributable to the parent company was 35 million yuan, a year-on-year increase of 2.61%; Deduct non net profit of 04 million yuan, a year-on-year decrease of 88.24%.
On the same day, the company released the report for the first quarter of 2022. In the first quarter, the company achieved an operating revenue of 100 million yuan, a year-on-year increase of 23.04%; The net profit attributable to the parent company was 25 million yuan, a year-on-year increase of 9.05%; Deducting non net profit of 24 million yuan, with a year-on-year increase of 10.91%, the basic earnings per share was 0.31 yuan.
The revenue of ultrasonic medical imaging equipment increased by more than 20%, which was greatly affected by exchange rate fluctuations
(1) in terms of products, ① the company mainly sells color Doppler ultrasound, and the income of color Doppler ultrasound accounts for 78.91%. In 2021, the operating revenue of ultrasonic medical imaging equipment was 374 million yuan, with a year-on-year increase of 20.69%; The sales volume was 12171 sets, with a year-on-year increase of 28.52%. ② The operating income of accessories and others was 19 million yuan, a year-on-year increase of 5.48%; ③ The revenue from technical service fees was 02 million yuan, a year-on-year increase of 65.68%.
(2) in terms of regions, ① the company focuses on export sales. In 2021, the overseas revenue was 345 million yuan, accounting for 87.38%, with a year-on-year increase of 26.92%, and the gross profit margin decreased by 2.98 PCT to 54.38%; ② The domestic revenue was 50 million yuan, with sales accounting for 12.62%, and the gross profit margin increased by 3.15 PCT to 67.97% year-on-year.
The company’s comprehensive gross profit margin decreased by 2.29pct to 56.29%, mainly due to factors such as lower growth of operating revenue than that of operating cost caused by exchange rate fluctuations.
(3) cost rate analysis: ① in 2021, the company continuously increased the research and development of new products, carried out pre research reserves for medium and long-term new technologies, and continued to maintain a high proportion of R & D investment. The annual R & D cost increased by 29.93% year-on-year, and the R & D cost rate increased by 1.47pct to 18.17% year-on-year; ② While increasing R & D investment, the company vigorously explored markets outside China and accelerated the construction of marketing system and network layout. The annual sales expense increased by 29.74% year-on-year, and the sales expense rate increased by 1.00pct to 12.52% year-on-year; ③ The company recruited excellent management talents, increased recruitment service fees and employee salaries, and the management fee rate increased by 1.06pct to 7.10% year-on-year; ④ As the fluctuation range of the exchange rate between the US dollar and the RMB is less than that of the previous year, the financial expense ratio decreased by 1.48pct to 0.99% year-on-year. Under the comprehensive influence, R & D expenses and sales expenses increased significantly, resulting in the growth rate of net profit slightly lower than that of operating revenue, and the overall net interest rate of the company decreased by 1.64pct to 28.27%.
(4) according to the analysis of cash flow, the net cash flow generated from the company’s operating activities in 2021 was 39.961 million yuan, a year-on-year decrease of 51.53%, mainly due to: ① with the company’s increasing investment in R & D and accelerating the construction of marketing system and network layout, the corresponding employee compensation has increased significantly; ② Under the epidemic situation, there is a shortage of electronic materials such as chips in the world, and the logistics is not smooth, which leads to the extension of overseas transportation time, the lengthening of procurement cycle and the great uncertainty of material delivery time. In order to ensure the supply chain and the timely delivery rate to customers, the company has carried out strategic procurement and reserve of such materials, and the payment for such procurement has increased.
Continuously strengthen product innovation and steadily promote the construction of global and Chinese marketing networks
(1) focus on Innovation: in 2021, the company obtained a total of 7 new Chinese market access licenses and 5 foreign market access licenses. Among them, the portable miniaturized products have obtained the Chinese registration certificate and the FDA access license on behalf of sonoeye series handheld color Doppler ultrasound; The Xbit series of high-end color Doppler ultrasound has obtained the Chinese registration certificate. In July 2021, China Medical Equipment Association announced the list of the seventh batch of excellent domestic medical equipment products, and more than 40 excellent ultrasonic products in seven series, including Chison Medical Technologies Co.Ltd(688358) high-end intelligent wheeled color Doppler Xbit, intelligent handheld sonoeye and high-end notebook color Doppler sonobook, were successfully selected.
(2) expand capacity and improve efficiency, and steadily promote the construction of global outlets and new bases: in 2021, the company actively promoted the layout of local marketing networks in overseas markets such as India, Mexico, Italy and Brazil, so as to further promote the construction of overseas brands and the implementation of marketing achievements; On the other hand, the company set up a wholly-owned subsidiary in Shanghai to participate in the construction of raised investment projects, further improving China’s marketing network and promoting the progress of R & D projects; Wuxi headquarters, where the company is registered, has completed the construction and relocation of industrialization base, and the product production capacity has been greatly improved; Meanwhile, the company started the construction of a global intelligent innovation R & D center in the second half of 2021 and is expected to be put into use in the first half of 2023.
(3) the epidemic has driven China’s policies to increase and accelerate the development of the industry: the epidemic has exposed the shortcomings of China’s medical system to a certain extent. The state, local provinces and cities will gradually strengthen the efforts to make up for the shortcomings of medical treatment, and high-quality domestic brands will usher in development opportunities. According to the notice on printing and distributing the guiding standards for the audit of imported products purchased by the government (2021 version) jointly issued by the Ministry of Finance and the Ministry of industry and information technology, all 137 kinds of medical devices are required to be 100% domestic, 12 kinds of medical devices are required to be 75% domestic, 24 kinds of medical devices are required to be 50% domestic, and 5 kinds of medical devices are required to be 25% domestic. Among them, except for two products, medical ultrasonic instruments and equipment, For the rest, it is suggested to purchase all domestic products. Guangdong, Zhejiang, Shaanxi, Beijing and other places have also successively introduced import product management measures to further promote domestic medical device enterprises with product and brand advantages to play a role in the Chinese market.
Profit forecast and investment rating: Based on the analysis of the company’s core business segment, we predict that the operating revenue from 2022 to 2024 will be 485 million / 590 million / 708 million respectively, with a year-on-year growth rate of 22.01% / 21.52% / 20.09% respectively; The net profit attributable to the parent company was 135 million, 162 million / 195 million respectively, with a year-on-year growth rate of 20.14% / 20.19% / 20.37% respectively; EPS is 1.69/2.03/2.44 respectively, corresponding to 21 times PE in 2022 according to the closing price on April 18, 2022. Maintain the “buy” rating.
Risk tips: global epidemic risk, exchange rate fluctuation risk, trade friction risk, business model related risk, product R & D failure risk and single product structure risk.
