\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Key investment points
Event: the company released the annual report and the first quarterly report. In the 21st century, the annual revenue was 8.04 billion (- 35.9%), and the net profit attributable to the parent company was 1.24 billion (- 72.6%). The decline was mainly due to the high base of revenue and profit margin brought by the outbreak of demand for epidemic prevention related products in the past 20 years; The revenue of 22q1 was 2.32 billion (+ 2.4%), and the net profit attributable to the parent company was 357 million yuan (- 25.7%). The decline in Q1 profit was mainly related to the year-on-year decline in overseas protective product orders.
Medical consumables business: the high base of export demand affects the apparent growth rate. The expansion of business channels in China is gratifying. High end dressings are combined with Longtai medical.
In 2021, the company’s medical consumables business revenue was 3.92 billion yuan (- 56%), of which overseas sales were 1.69 billion yuan (- 72%), mainly from the decline in the demand for disease control products, while domestic sales benefited from the improvement of brand strength. The channel revenue of Chinese hospitals was 1.25 billion yuan (+ 12.5%), and the coverage channels were expanded from 3000 to 4000, China’s medical C-end (pharmacy + e-commerce) exceeded 1 billion yuan (a year-on-year increase of single digits, an increase of 400% compared with 19 years). In terms of products, in 2021, the revenue of disease control and protection / surgical sensing control / disinfection and cleaning / traditional wound care products decreased by 66% / 37% / 24% / 5%, while the revenue of high-end dressing products increased by 23%. Also due to the year-on-year decline in unit price driven by the decline in demand for disease control related products, the gross profit margin of medical consumables business in the 21st year decreased by 14.0pp to 47.5%.
From the perspective of 22q1, the business income of medical consumables was 1.407 billion (- 1.7%), of which 328 million (- 48%, mainly related to the high base caused by the high price of overseas order delivery in 21q1), and 1.079 billion yuan (+ 34%) was sold in China. In Q1, the demand for anti epidemic in China increased, and the product supply was in short supply. Among them, the income of Chinese hospitals increased by 59%, and the income of e-commerce channels was flat (under the priority supply line).
In April, the company announced the acquisition of 55% equity of Longtai medical, which is expected to be consolidated in Q3. Longtai medical was founded in 2012. Its founder Wu Kangping has more than 20 years of clinical experience. He has designed and innovated a variety of high-end wound dressings. At the same time, he has actively developed products such as household stoma, wound care and skin management. The compound growth rate of revenue / net profit in 19-21 is 15% / 14%, and the net profit rate in 2021 is as high as 24%. 70% of the revenue is OEM OEM OEM income in the United States and Europe, and the rest is sold by local OEM and innomed’s own brand, In 2021, Longtai medical income / net profit / deduction of non net profit was RMB 355 / 0.86/0.82 billion. The alliance with Longtai in the field of high-end dressings will empower Longtai through its own brand strength, 35 million member base, stronger sales channels and digital supply chain management, so as to further consolidate its leading position in the field of high-end dressings.
The healthy consumer goods business has blossomed in multiple channels, and the growth rate of textile products has led:
21. The business income of healthy living consumer goods in the whole year was 4.05 billion yuan (+ 15.3%), and the gross profit margin was 52.2% (- 3.0pp, from the pressure of rising costs). If mask related products were excluded, the income of other products increased by 24.8%.
Looking at the 21 years by channels: 1) the revenue of offline stores was 1.23 billion (+ 29.3%), of which the sales of stores opened for more than 2 years increased by 15%. At the same time, 81 stores (63 Direct stores and 18 franchises) were added during the year, and the number of stores reached 345 (including 320 in the cotton era and 10 in Jinliang life); 2) The channel revenue of supermarkets reached 203 million (+ 51%), and more than 380 RT Mart stores, Better Life Commercial Chain Share Co.Ltd(002251) 239 stores and more than 4000 Watson outlets were added during the year; 3) The revenue of e-commerce was 2.54 billion (+ 8.7%), including 560 million (+ 45%) from official websites, apps and other self owned platforms. At the end of the 21st year, there were 35 million global members in the cotton era and 16.84 million private members (+ 32%)
By product: in the 21st year, the revenue growth rate of textile / non-woven products reached 43% / – 2% respectively, accounting for 47% / 53% of the revenue. Among non-woven products, the revenue of cotton soft towels, the fist product, was 9.6 billion (+ 2%), sanitary napkins was 550 million (+ 32%), the revenue of wet wipes and other non-woven products fell by 17% / 26%, and the revenue of baby products / baby clothing / adult clothing / other textile products increased by 30% / 39% / 52% / 46% respectively, It reflects the customers’ preference for the concept of all cotton under the background of the improvement of brand strength and the rising demand for home life quality.
22q1: the revenue of the healthy living sector was 890 million yuan (+ 8.8%). In terms of channels, the revenue of stores under the pressure of the epidemic increased by 14.3%, mainly from the growth of the same store, the revenue of supermarkets increased by 45.5%, and the contribution of new customers such as RT mart, Watsons and Yonghui; In terms of e-commerce, due to the Limited Logistics and the decline in the flow of traditional platforms, the revenue decreased by 8.0% at the same time, but the revenue of its own platform official website and applet increased by 29.4% at the same time; At the same time, benefiting from the narrowing of retail discounts and fee control, the profitability of health consumer goods business has been improved.
Profit forecast and Valuation: considering the short-term impact of the epidemic on logistics and terminal consumption, we expect the company’s revenue of 9.1/106/12.3 billion yuan in 22 / 23 / 24, a year-on-year increase of + 13% / + 17% / + 15%, net profit attributable to the parent company of 1.35/15.9/1.84 billion yuan, a year-on-year increase of + 9% / + 17% / + 16%, corresponding to PE 19 / 16 / 14x as the leader of medical consumables and healthy consumer goods, which deserves continuous attention. Considering the growth of performance and the valuation premium relative to the industry, Maintain the “overweight” rating.
Risk tips: 1) trade friction risk; 2) Risks of changes in industry standards; 3) The risk that the consumption environment will be affected by the black swan incident
