\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
The company released its 2021 annual report / first quarterly report. In 2021, it achieved revenue and net profit of 8.04 billion and 1.24 billion, down 35.9% and 67.5% year-on-year; 22q1 revenue and net profit increased by + 2.37 and – 25.69% year-on-year.
Medical consumables business: affected by the high epidemic base in 2020, it decreased year-on-year, but the e-commerce channel developed rapidly. In 2021, the company’s medical consumables business realized a revenue of 3.92 billion yuan, a year-on-year decrease of 55%, mainly due to the high base of the epidemic in 2020, an increase of 161% compared with 2019. 1) By product: the revenue of wound care, infection protection and disinfection and cleaning products was 830 / 281 / 280 million respectively, with a year-on-year increase of – 2.1% / – 63.5% / – 24.3% respectively. The decline of infection protection was mainly due to the return of raw materials and product prices to normal. 2) By channel: direct selling / distribution / agency / e-commerce increased by – 76.7% / – 23.9% / – 54.3% / + 37.1% year-on-year respectively.
Healthy consumer goods: the expansion of stores is orderly, and the self owned platform of official website / applet is growing rapidly. In 2021, the company’s revenue from healthy consumer goods reached 4.05 billion yuan, a year-on-year increase of 15.27%. 1) By product: sanitary napkins, baby products, baby clothing, adult clothing and other categories grew rapidly, with an increase of more than 30%, cotton soft napkins grew steadily (+ 2%), wet napkins declined (- 17%), and the decline of wet napkins was mainly caused by chemical fiber raw materials and low-cost competition in the market. 2) By channel: the sales revenue of e-commerce channels was 2.54 billion yuan, a year-on-year increase of 8.7%, of which the sales revenue of official websites, small programs and other self owned platforms was 562 million yuan, a year-on-year increase of 44.85%; Offline stores realized a revenue of 1.24 billion, an increase of 29% year-on-year, including a net increase of 51 to 326 Direct stores and 18 to 23 franchise stores. Supermarkets and key customer channels increased by 51% and – 17% respectively.
The profitability of 21q4 declined, and the gross profit margin of disease control and protection products tended to be stable. Quarterly, the net interest rates of 21q1-q4 are 21.2% / 15.7% / 19.5 / 6.1% respectively. We believe that the sharp decline of Q4 net interest rate is related to the fierce business competition and increased online investment in the cotton era. The net interest rate of 22q1 was 15.4%, which improved month on month, but still fell by 5.8 PCTs year-on-year. We speculate that it is related to the high base caused by the delivery of some high price export orders in 21q1. In addition, the price and gross profit margin of disease control and protection products have returned to normal level in 21q3, and it is expected to remain stable in the future.
Looking forward to the whole year, the company’s consumer goods business is affected by the epidemic, and the short-term flow growth is facing certain challenges. On the other hand, the repeated epidemic may partially benefit the company’s medical consumables business. On the whole, the company is a consumer company with clear strategy and focused business. In recent years, its business at the TOC end has developed rapidly. After the disturbance of the epidemic for about three years, the company has superimposed positive extension resource integration (recently announced the acquisition of Longtai medical, a high-end dressing company). We expect the company to return to a healthy and rapid growth track in the future
Profit forecast and investment suggestions
According to the annual report and the first quarterly report, we lowered the profit forecast for 20222023 and predicted that the earnings per share for 20222024 would be 3.09 yuan, 3.69 yuan and 4.23 yuan respectively (compared with 4.18 yuan and 4.89 yuan in 20222023). Referring to comparable companies, we gave the company 21 times PE valuation in 2022, corresponding to the target price of 64.97 yuan, maintaining the “overweight” rating of the company.
Risk tip: market competition intensifies, customer expansion and gross profit margin are less than expected, and category expansion is less than expected
