\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 60 Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) )
Matters:
(1) the company released its annual report for 2021: the company achieved a revenue of 25.270 billion yuan (+ 20.18%), a net profit of 8.002 billion yuan (+ 20.19%), and a net profit of 7.85 billion yuan (+ 20.04%) after deduction. In line with market expectations. The annual dividend plan is to pay out 35 yuan (including tax) for every 10 shares. (2) The company released the first quarter report of 2022: in the first quarter, the company achieved a revenue of 6.943 billion yuan (+ 20.10%), a net profit of 2.105 billion yuan (+ 22.74%), and a net profit of 2.072 billion yuan (+ 22.20%) after deduction.
Ping An View:
It maintained rapid growth throughout the year, and the product structure returned to normal
In the environment of global epidemic spread and normal operation of medical system, the company continues to achieve rapid growth. Under the high base in 2020, the company still maintained an increase of more than 20% in 2021. If the exchange factor is excluded, it is estimated that the annual revenue and profit growth of the company are about 2.2pp and 4.1pp higher than the apparent data.
Throughout the year, the company’s product structure returned to normal. The growth rate of the vital information and support sector, which benefited from the most obvious epidemic demand, fell slightly, realizing an income of 11.153 billion yuan (+ 11.47%). It is speculated that the monitoring products are basically the same as that of the previous year, while non epidemic products such as anesthesia and defibrillation have achieved rapid growth; The IVD product line achieved a revenue of 8.449 billion yuan (+ 27.12%), and blood cells, biochemistry and luminescence (non covid-19) achieved significant recovery and growth; The demand for image products returned from outside China, and the revenue of the sector was 5.426 billion yuan (+ 29.29%).
In the single quarter of 2021q4, the company realized a revenue of 5.878 billion yuan (+ 18.46%), and a net profit of 133867 billion yuan (+ 3.41%). The lower profit growth is due to the decrease of interest income due to the increase of employee incentive, R & D expenses and cash acquisition of haipeptide. There is no problem with the profitability of the company itself.
2022q1 performed steadily, and non epidemic products are expected to continue high growth
The company’s performance in 2022q1 was as stable as ever, with revenue and profit continuing to grow by more than 20%, gross profit margin remained stable (+ 0.07pp) year-on-year, and the total expense rate of sales, management and R & D expenses was 30.75% (- 1.50pp), a slight decrease. Net operating cash flow was – 21.68%, mainly affected by (1) the reduction of advance orders related to the epidemic and the acceleration of delivery; (2) Increase raw material reserves and expenditure; (3) The cash incentive plan increases the current salary expenses.
Looking forward to 2022, although the recurrence of the global epidemic may still be maintained for some time, the medical order in most countries and regions has been basically restored. Therefore, the company’s product structure will further return to normal in 2022. Defibrillator, chemiluminescence, ultrasound and other non epidemic products are expected to continue the trend in 2021 and become the core driving force for the company’s sustainable growth.
Benefiting from the overweight of medical construction, product iteration continues to improve the industry position
The epidemic has exposed the shortcomings of national medical systems. In the post epidemic era, the overweight construction of medical facilities has become an important task for countries in the next few years. Whether it is China’s new medical infrastructure or the medical weakness board in many overseas places, they are continuously advancing. On the other hand, under China’s medical reform measures, county-level hospitals that play a connecting role have become important development goals, and relevant hospitals have increased construction investment in various ways. Based on the above factors, the demand for medical devices will remain at a high level for a long time.
On the supply side, the company’s products continue to iterate, and more categories and more advanced products meet the different needs of medical institutions. For the existing products, the company has launched a series of high-end upgraded versions such as A8 / A9 anesthesia machine, high-speed biochemical and light-emitting equipment bs-2800m and cl-8000i, which will bring more value to users; In recent years, the company’s newly launched orthopedics, endoscopy, pet medical and other products have also entered the eve of mass production. At a higher level, iteration is also reflected in the transition of products provided by the company from a single commodity to an intelligent solution. The ecosystem composed of a variety of products and intelligent systems helps the company jump out of the traditional product competition logic.
Maintain a “recommended” rating. With the increase of medical investment outside China and the promotion of China’s medical reform, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) as a leading enterprise with platform advantages and product innovation advantages, its advantages are further enhanced. The company is ahead of its competitors in the layout of medical intelligence, and is expected to further bind terminals and strengthen its market position. Due to the change of share capital and the rapid recovery of the company’s non epidemic products, the EPS forecast from 2022 to 2024 is adjusted and added to 7.96, 9.67 and 11.72 yuan (the EPS forecast from 2022 to 2023 was 8.19 and 10.00 yuan respectively), maintaining the “recommended” rating.
Risk tips: 1) if the market demand or pattern changes significantly, resulting in the company’s sales volume lower than expected or the price is significantly reduced, it may have a negative impact on the company’s performance; 2) The company’s overseas revenue accounts for a relatively high proportion, and overseas sales may be affected by multiple factors such as international situation or exchange rate; 3) M & A is a common way for medical device companies to expand their product lines. If the company encounters difficulties in the process of M & A or subsequent integration, it may have an adverse impact on its business development.
