\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 60 Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) )
Key investment points
Event: 1) the company released]2021 annual report. The annual revenue was 25.27 billion yuan (+ 20.2%), the net profit attributable to the parent company was 8 billion yuan (+ 20.2%), the net profit not attributable to the parent company was 7.85 billion yuan (+ 20%), and the net cash flow from operating activities was 9 billion yuan (+ 1.5%). 2) The company released the first quarterly report of 2022. In 2022q1, the revenue was 6.94 billion yuan (+ 20.1%), the net profit attributable to the parent was 2.11 billion yuan (+ 22.7%), the net profit not attributable to the parent was 2.07 billion yuan (+ 22.2%), and the net cash flow from operating activities was 870 million yuan (- 21.7%).
The performance is in line with expectations and the profitability remains at a high level. Quarter by quarter, the revenue of 2021q1 / Q2 / Q3 / Q4 in a single quarter was 57.8/70/66.1/5.88 billion yuan (+ 21.9% / + 20.2% / + 20.3% / + 18.5%), and the net profit attributable to the parent company in a single quarter was 17.2/26.3/23.2/1.34 billion yuan (+ 30.6% / + 22.8% / + 21.4% / + 3.4%), which was mainly due to the company’s increased R & D investment. From the perspective of profitability, the gross profit margin in 2021 is 65%, which is basically the same as that in 2020. The four rate is 29.8% (- 0.2pp), of which the sales expense rate decreases by 1.4pp to 15.8%, but the R & D expense rate increases by 1.1pp to 10%. Taking the above factors into account, the annual net profit margin is 31.7%, which is basically the same as that in 2020. The income side of 2022q1 is slightly negatively affected by the Chinese epidemic. If the impact of tax rate and share based payment fee is excluded, the growth rate of profit side is expected to exceed 25%, which is in line with the overall expectation, and the profitability remains at a high level.
IVD and imaging business led the growth, and the Chinese market contributed the main increment in 2021. According to the production line, the income of life information and support production line in 2021 was 11.15 billion yuan (+ 11.5%, excluding the growth rate of anti epidemic products of more than 55%), and the gross profit margin was 66.4% (- 1.6pp). Among them, the base of anti epidemic product monitors, ventilators and infusion pumps was under pressure, and the businesses such as defibrillators, anesthesia machines, light bed towers and hard mirrors were growing rapidly; In 2021, the revenue of IVD production line was 8.45 billion yuan (+ 27.1%, excluding anti epidemic products, with a growth rate of more than 40%), and the gross profit margin was 62.5% (+ 2.8pp). Mainly due to the increase in the proportion of diagnostic reagents, it is expected that China’s luminescence will add 1600 units in 2021, and the amount of conventional reagents outside China will be large. At the same time, biochemistry and blood cells will also return to good growth under the low base in 2020; In 2021, the revenue of the image production line was 5.43 billion yuan (+ 29.3%), and the gross profit margin was 66.3% (+ 0.1pp). Since the second half of 2021, China and international ultrasonic procurement resumed rapid growth. In terms of subregions, in 2021, China’s market revenue was 15.26 billion yuan (+ 37.3%), accounting for 60.4%, and the international market revenue was 10.01 billion yuan (+ 1%), accounting for 39.6%. Excluding anti epidemic products, the growth rate of China and foreign countries exceeded 40% and 35% respectively.
“Innovation + M & A + internationalization” is expected to help the company become a global device giant and inspire and demonstrate the company’s confidence in future development. In 2021, the company invested 2.73 billion yuan (+ 30.1%), accounting for 10.8% of its revenue. The company further increased product innovation and R & D. on the one hand, it increased R & D investment in automation and intelligent assembly lines in the field of in vitro diagnosis, ventilator sub business in the field of microbial sub business and life information and support, in-hospital and Cross Hospital Monitoring and interconnection, on the other hand, it focused on cultivating minimally invasive surgery, animal medicine At the same time, it actively explores seed businesses such as ultra-high-end color ultrasound, molecular diagnosis and orthopedics, and adopts the combination of internal and external research and development to speed up the pace of research and development in these fields. In January 2022, the company issued the employee stock ownership plan, with the incentive target that the compound growth rate of apparent net profit attributable to the parent company from 2022 to 2024 is more than 20%. If excluding the share based payment expenses to be amortized, the actual growth rates of endogenous net profit from 2022 to 2024 are 24%, 23% and 21% respectively, which shows the company’s confidence in the steady development in the future. We expect that the company is expected to become the top 20 domestic giant company of global devices in 5 to 10 years, and the development prospect is determined.
Profit forecast and investment suggestions: considering the impact of share based payment expenses, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 9.79 billion yuan, 12.03 billion yuan and 14.89 billion yuan respectively, with corresponding EPS of 8.07, 9.92 and 12.28 yuan and corresponding PE of 41, 33 and 27 times, maintaining the “buy” rating.
Risk tip: exchange rate fluctuation risk, policy cost control risk, and new product research and development are not as expected.
