\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Key investment points
Performance summary: the company released the annual report of 2021 and the first quarterly report of 2022, and achieved a revenue of 8.04 billion yuan (- 35.9%) in 2021; The net profit attributable to the parent company was 1.24 billion yuan (- 67.5%); The net profit deducted from non parent company was 1.03 billion yuan (- 72.6%). The operating income of the company was RMB 2.6 billion in 2024, of which the operating income was RMB 2.6 billion in 2024; The net profit attributable to the parent company was 140 million yuan (- 79.5%); The net profit deducted from non parent company is RMB 80 million (- 87%); The company’s annual revenue scale and profitability declined in 2021 as a whole. In 2022, Q1 company realized an operating revenue of 2.32 billion yuan (+ 2.4%); The net profit attributable to the parent company was 360 million yuan (- 25.7%); The net profit deducted from non parent company was 330 million yuan (- 27.9%), the income scale maintained positive growth under the high base, and the performance was under pressure temporarily.
Gross profit margin returned to normal and brand marketing investment increased. In 2021, the company’s overall gross profit margin was 49.9% (- 9.7pp), 21q4. Among them, the gross profit margin of the company’s medical consumables in 2021 was 47.5% (- 14pp), which was mainly due to the weakening of the impact of the epidemic in 21 years, the increase in the supply of disease control and protection products, and the price gradually returned to the normal level; The gross profit margin of healthy consumer goods was 52.2% (- 3PP), mainly due to the rise in the price of raw and auxiliary materials such as cotton. In terms of expense rate, the overall expense rate of the company in 2021 was 32.8% (+ 11.7pp). Among them, the company’s sales expense rate was 24.8% (+ 12.2pp), which was mainly due to the company’s increased investment in brand publicity and promotion, the increase of sales personnel and store clerks, the increase of employee salary expenditure, and the year-on-year increase of sales expense of 26.3%; The management fee rate is 5.7% (+ 2.2pp); The R & D expense rate is 3.7% (+ 0.4pp); The financial expense ratio is – 1.3% (- 3.1pp), which is mainly affected by exchange rate fluctuations and the company’s exchange loss is reduced. Overall, the net profit margin of the company is 15.4% (- 15pp). In 2021, the company realized a net operating cash flow of 870 million yuan (- 81.7%). At the end of 2021, the company’s inventory was 1.6 billion yuan (+ 31.3%), mainly due to the rise in the price of raw and auxiliary materials and the company’s strategic stock.
22q1’s profitability is temporarily under pressure under the high base, and the revenue scale has achieved positive growth. The gross profit margin of 2022q1 company is 47.8% (- 6.9pp), which is mainly due to the high price orders signed in the second half of 20 years are mainly delivered in Q1 of 21 years, resulting in a high base of gross profit margin and net profit margin in Q1 of 21 years. The net cash flow from operating activities was 400 million yuan (+ 111.4%), and the cash flow improved.
The proportion of domestic sales of medical consumables business has increased, and the C-end business has developed rapidly. In 2021, the company’s medical consumables business revenue was 3.92 billion yuan (- 56%), and the export and domestic sales revenue were 40% and 60% respectively, accounting for more than half of the domestic sales revenue. 1) The export revenue was 1.69 billion yuan (- 71.7%), mainly due to the decline in the sales of disease control and protection products; 2) The sales revenue of Chinese hospitals was 1.25 billion yuan (+ 12.5%), and the number of hospitals covered increased from 3000 to more than 4000, mainly concentrated in hospitals above level II; 3) The sales of medical C-end (pharmacy + e-commerce) exceeded 1 billion yuan, accounting for 25.7% of the medical sector, of which the income of medical e-commerce channel reached 680 million yuan, accounting for 17.3% of the medical business. In terms of products, the income of masks and protective clothing in 2021 was 1.94 billion yuan, accounting for 49.5% of the medical business in 2021 (63.2% in 2020), and the sales of other medical consumables was 1.98 billion yuan. Among them, the revenue of high-end wound dressings reached 110 million yuan (+ 23%) in 2021. Most of the revenue comes from overseas markets. Due to the cost control factors of medical insurance in the international market, it is expected to further undertake more overseas orders. In April 2022, the company acquired 55% equity of Longtai medical, aiming to integrate the advantages of product R & D and production of both sides and build itself into a leader in the high-end wound accessories industry. It is expected that in the future, with the gradual emergence of scale and synergy, the market share and coverage of the company in the high-end wound dressing industry will be steadily improved.
New products are coming out one after another in the consumer goods sector, and the channel operation tends to be refined. In 2021, the company achieved a revenue of 4.05 billion yuan (+ 15.3%). In terms of products, the revenue of cotton soft Napkins / sanitary napkins was 960 million yuan (+ 2%) / 550 million yuan (+ 31.7%) respectively, and the revenue of textile products such as baby products / baby clothes / adult clothes was 3.6 (+ 2.2%) / 5.1 (+ 2.9%) / 680 million yuan (+ 3.6%) respectively. The new products showed strong performance and gradually became a new driving force for performance growth. In terms of sub channels, the e-commerce of consumer goods / offline stores / supermarket channels achieved revenue of 2.54 billion yuan (+ 29.3%) / 1.23 billion yuan (+ 51.2%) / 200 million yuan (- 16.6%), respectively. The company opened the market through multi platform operation and increased the pace of store expansion, resulting in a rapid increase in the scale of offline business. Among them, in 2021, the company added 81 chain stores and opened 63 Direct stores, including cotton era, Jinliang life and cotton Liwu; 18 new franchise stores have been opened. There are 322 Direct stores / 23 franchised stores in stock. In 2021, the average store efficiency of the company increased by 25.4%, of which large stores with more than 800 square meters and medium-sized stores with Tus-Design Group Co.Ltd(300500) square meters increased by more than 30%, and the store structure was more reasonable. In the year of 22, Q1 company achieved a revenue of 1.41 billion (- 1.7%) for medical consumables and 890 million (+ 8.8%) for healthy living consumer goods. Under the condition that some stores could not operate normally and regional logistics was interrupted, the sales of healthy living consumer goods continued to improve.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 3.61 yuan, 4.37 yuan and 5.18 yuan respectively, and the corresponding PE will be 17 times, 14 times and 12 times respectively, maintaining the “buy” rating.
Risk tips: the risk of sharp fluctuations in raw material prices, the risk that the synergy effect of the acquisition business is not as expected, the risk of continuous rise in shipping prices, and the risk of large exchange rate fluctuations.
