\u3000\u3 Shengda Resources Co.Ltd(000603) 987 Shanghai Kindly Enterprises Development Group Co.Ltd(603987) )
Event: in 2021, the company achieved an operating revenue of 3.097 billion, a year-on-year increase of 17.07%, a net profit attributable to the parent company of 291 million, a year-on-year increase of 43.71%, a deduction of non net profit of 257 million, a year-on-year increase of 39.23%, and an operating cash flow of 409 million, a year-on-year increase of 1.41%.
In 2021, the net profit margin increased significantly and the business growth of the group headquarters was bright: the company’s performance continued to grow rapidly in 2021, the growth rate of net profit attributable to the parent was significantly higher than that of operating revenue, and the profitability improved significantly. The net profit attributable to the parent increased from 7.7% in 2020 to 9.4% in 2021, mainly due to the improvement of product structure and the significant improvement of the profitability of the group headquarters. Excluding the subsidiaries Shanghai Kindly Enterprises Development Group Co.Ltd(603987) medical equipment (25.8% equity held by the company) and Guangxi Ouwen (51% equity held by the company), in 2021, the group headquarters achieved an income of about 1.7 billion, a year-on-year increase of 28.5%, a net profit of about 230 million, a year-on-year increase of 67%, and a net interest rate of about 13.6%.
The proportion of finished needles with high gross profit continued to increase, and the performance of syringes was good: in 2021, the company’s revenue of finished needles with high gross profit (indwelling needles, insulin needles, etc., with a gross profit margin of 43%, and the overall gross profit margin of the company was only 38%) reached 560 million yuan, with a year-on-year increase of 28.4%, the proportion of revenue reached 18%, an increase of 1.6 percentage points over 2020, and the proportion of contribution to the company’s performance continued to increase. Benefiting from the demand for covid-19 vaccine injection, the company’s syringe revenue in 2021 was 820 million, with a year-on-year increase of 49.93%. It is expected that the company’s syringe business will continue to maintain steady growth with the continuous vaccination of covid-19 vaccine, the recovery of routine diagnosis and treatment demand and the launch of the company’s new specifications of syringes. In addition, the company’s infusion set revenue was 126 million, a year-on-year decrease of 10.97%, which is expected to be mainly due to the suppression of the epidemic and the demand for routine diagnosis and treatment.
The puncture product line continues to enrich and actively extends the second growth curve: the company’s disposable safety injection needle, disposable safety syringe and other products have completed the registration and submission of FDA 510k, and the disposable pump syringe, disposable safety indwelling needle, disposable safety injection needle, disposable safety blood collection needle, disposable safety insulin pen matching needle and disposable improved dosing syringe will also be listed one after another, It will continue to consolidate the rapid and steady growth of the company’s puncture business. In addition, through industrial extension investment, the company will layout and develop the medical beauty industry, active equipment + passive consumables industry and specimen collection industry, which will lay the foundation for the medium and long-term sustainable growth of the company.
Profit forecast and investment suggestions: it is estimated that the operating revenue from 2022 to 2024 will be 3.782 billion / 4.418 billion / 5.198 billion, and the net profit attributable to the parent company will be 396 million / 497 million / 621 million yuan respectively, maintaining the “buy” rating.
Risk warning: the volume of new products is less than expected; Risk reduction of gross profit caused by centralized mining; Risk of foreign market sales falling short of expectations.
