\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 087 Cofoe Medical Technology Co.Ltd(301087) )
Event overview
On April 20, 2022, the company released its annual report for 2021. In 2021, the company realized an operating revenue of 2.276 billion yuan, a year-on-year decrease of – 4.19%; The net profit attributable to the parent company was 429 million yuan, a year-on-year increase of 1.16%; The net profit deducted from non parent company was 361 million yuan, a year-on-year decrease of 10.07%. The basic earnings per share is 3.39 yuan. Among them, Q4 achieved a revenue of 578 million in a single quarter, a year-on-year decrease of 8.81%; The net profit attributable to the parent company was 124 million yuan, a year-on-year increase of 34.38%.
The company issued the profit distribution plan for 2021. It plans to distribute cash dividends of 16.00 yuan (including tax) for every 10 shares based on 160375000 shares, and increase 3 shares for every 10 shares with capital reserve.
Affected by the high base of epidemic prevention products, the revenue is under pressure in the short term, and other business segments have recovered well to ensure the stability of the company’s revenue. In the past 20 years, the company’s revenue of epidemic prevention materials (thermometer, mask / gloves and disinfection products) reached 1.05 billion, and the main business revenue accounted for 45.19%. In the 21st year, with the changes in the supply and demand structure of epidemic prevention products market, the income of epidemic prevention products of the company declined from the high base of 20 years, and the performance was under pressure in the short term. After the normalization of the epidemic, the company adjusted its marketing strategy in time, and the products of other business sectors recovered well in 21 years. Among them, the rehabilitation accessories sector achieved a revenue of 415 million yuan, a year-on-year increase of 41.28%; Respiratory support sector achieved a revenue of 200 million yuan, a year-on-year increase of 26.44%; After excluding the influence of thermometer, the health monitoring sector increased by 32.58% year-on-year.
The profitability was improved and the expense rate remained stable during the period. Due to the change of accounting standards for sales expenses and operating costs, after retroactive adjustment of the comparison caliber for 20 years, the gross profit margin of the company’s sales in 21 years increased by 0.79pct to 43.83% year-on-year, mainly benefiting from the increase of the proportion of revenue and gross profit margin of rehabilitation accessories products, and the gross profit margin of rehabilitation accessories products increased by 9.36pct to 39.99%. During the 21 years, the expense rate of the company was 20.41%, which remained stable. The expense rates of sales, management and finance were 18.20% / 2.50% / – 0.29% respectively, with a year-on-year increase of -0.04pct / + 0.43pct / – 0.04pct. The decrease in the sales expense rate was mainly due to the decrease in the company’s online promotion and service fees.
Adhere to independent research and development, and continuously enrich product categories through “self research + M & a”. In 21 years, the company invested 705882 million yuan in R & D, a year-on-year increase of 59.47%. At the same time, the company set up two new research institutes and continuously expanded R & D personnel. At the end of 21, there were 264 R & D personnel, a year-on-year increase of 104.65%. Through independent research and development, the company has launched a variety of new products on the market, including blood glucose meter and test paper, uric acid detector and test paper, rapid detection test paper of gastric Helicobacter pylori, covid-19 antigen / antibody / neutralizing antibody detection kit, etc. In the second half of the year, the company completed the acquisition of Jirui medical devices (Shanghai) Co., Ltd. and started the acquisition of Beijia brand. Through the acquisition, the company further improved the product system of rehabilitation accessories. In addition, the company has a number of key projects under research, such as continuous blood glucose monitoring system and real ear analyzer, which are expected to contribute to the performance.
Pay attention to the development of hearing business and actively build a chain brand of healthy ear hearing. By the end of the 21st century, the company had 359 hearing aid fitting centers, including 210 new stores, mainly distributed in 11 provinces and cities such as Hunan, Shaanxi, Hainan and Guangxi. Based on the long-term development plan of hearing business, the company continued to expand its business coverage, promote the national regional business layout, and actively build a chain brand of healthy hearing.
Deepen the expansion of online and offline channels and accelerate the layout of overseas business. By the end of the 21st century, the company had 40 subsidiaries and 376 branches across the country, built a huge sales network, further consolidated and improved cooperation with e-commerce platforms and chain pharmacy customers, and continued to increase market coverage and channel sinking. We will actively expand the hospital market and supermarket market, develop new e-commerce channel operations, and further expand the market share of our products. At the same time, the company has established an international business department to actively register foreign products and accelerate the layout of overseas sales network.
Investment advice
Maintain the “buy” rating. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 559, 718 and 858 million yuan respectively, with a year-on-year growth rate of 30.4%, 28.4% and 19.5%, corresponding to EPS of 3.49, 4.48 and 5.35 yuan respectively, and the corresponding P / E of the current stock price is 15.81, 12.32 and 10.30 times. The company is the leader of China’s whole life cycle health management, with a wide range of products, which is expected to realize the rapid development of multi sector business. In addition, the company vigorously develops the hearing business and has a broad growth space.
Risk tips
Core technology disclosure risk, new product R & D risk, management risk caused by business scale expansion, intellectual property risk, etc.
