\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 60 Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) )
Performance Brief
On April 19, 2022, the company issued its annual report for 2021. In 2021, the company realized a revenue of 25.270 billion yuan, a year-on-year increase of + 20%; The net profit attributable to the parent company was 8.002 billion yuan, a year-on-year increase of + 20%;
In the fourth quarter, Q4 company achieved a revenue of 5.878 billion yuan in 2021, a year-on-year increase of + 18%, and a net profit attributable to the parent company of 1.339 billion yuan, a year-on-year increase of + 3%;
On the same day, the company also released the first quarter report of 2022. In 2022q1, the company realized a revenue of 6.943 billion yuan, a year-on-year increase of + 20%; The net profit attributable to the parent company was RMB 2.105 billion, a year-on-year increase of + 23%.
Business analysis
China’s medical investment continues to increase, promoting the development of equipment manufacturing enterprises. In 2021, the market space of China’s new medical infrastructure has exceeded 20 billion yuan. As a leading brand of domestic medical devices, Mindray is more suitable for the needs of new medical infrastructure. In 2021, the revenue of the company’s life information and support products reached 11.153 billion yuan, a year-on-year increase of + 11% (Two-year compound growth of + 33%). All businesses have achieved steady development, the relevant product lines restrained by the epidemic have gradually recovered, and the overall growth of the company has continued to be stable.
Continue to invest in R & D and innovation, and continuously upgrade and iterate products. The company’s annual profit margin was basically flat year-on-year, R & D investment continued to grow, and R & D expenses increased by 35% year-on-year in 2021. The company has continuously enriched its products, continued technical iteration and achieved breakthroughs in high-end products in many fields, including high-end anesthesia machine, high-end chemiluminescence analyzer, bc-7500crp, high-end ultrasound system, 4K ultra-high definition fluorescent endoscope camera system, etc.
Cash incentive and equity incentive go hand in hand to improve employees’ enthusiasm. The company attaches importance to the improvement of the work enthusiasm of core employees and technical backbones. While implementing long-term cash incentive, the company launched a new round of employee stock ownership plan in early 2022, with a wide coverage and a target compound growth rate of 20% in three-year performance, demonstrating the company’s development confidence.
A series of new policies are gradually implemented, and domestic enterprises are expected to benefit. The implementation of a series of policies such as public hospital performance appraisal, DRG / dip and centralized volume procurement provides an opportunity for high-quality domestic enterprises that master core technologies and provide cost-effective products to accelerate their entry into public medical institutions. In 2021, the company actively responded to the national volume procurement mode, participated in volume procurement including orthopedics and in vitro diagnostic products, and finally achieved good bid winning results and the opportunity to rapidly expand market share.
Profit adjustment and investment suggestions
We continue to be optimistic about the company’s innovation strength and long-term value. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 9.604 billion, RMB 11.656 billion and RMB 13.995 billion, with a year-on-year increase of 20%, 21% and 20%. The EPS will be RMB 7.92, 9.61 and 11.54, corresponding to 41, 34 and 28 times of PE, maintaining the “buy” rating.
Risk tips
Product expansion is less than expected risk; Risk of medical insurance fee control policy; M & A integration management risk.
