\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 087 Cofoe Medical Technology Co.Ltd(301087) )
Event: on April 20, 2022, the company released its annual report for 2021: the company achieved an annual operating revenue of 2.276 billion yuan, a year-on-year decrease of 4.19%; The net profit attributable to the parent company was 429 million yuan, a year-on-year increase of 1.16%; Deduct non net profit of 361 million yuan, a year-on-year decrease of 10.07%. The basic earnings per share is 3.39 yuan. It is proposed to distribute cash dividends of 16.00 yuan (including tax) to all shareholders for every 10 shares, and increase 3 shares for every 10 shares to all shareholders with capital reserve.
Among them, the operating revenue in the fourth quarter of 2021 was 578 million yuan, a year-on-year decrease of 8.81%; The net profit attributable to the parent company was 124 million yuan, a year-on-year increase of 34.38%; Deduct non net profit of 81 million yuan.
The income of rehabilitation accessories products increased by more than 40%, and the independent production capacity continued to improve
In 2021, with the normalization of covid-19 pneumonia epidemic prevention and control, the market supply of epidemic prevention related products was sufficient, and the income of epidemic prevention products such as thermometer and gloves decreased more than the high base in the same period of last year. However, the products such as sphygmomanometer, blood glucose series, wheelchair, nursing bed and ventilator recovered rapid growth: ① in 2021, the sales revenue of medical and nursing products of the company was 765 million yuan, a year-on-year decrease of 9.88%; The gross profit margin increased by 0.68pct to 48.31% year on year; ② The revenue of health monitoring products was 554 million yuan, a year-on-year decrease of 28.66% (excluding the influence of thermometer, other products increased by 32.58% year-on-year); The gross profit margin decreased by 5.15pct to 40.27% year on year; ③ The revenue of rehabilitation accessories was 415 million yuan, a year-on-year increase of 41.28%; The gross profit margin increased by 9.36 PCT to 41.28% year on year; ④ Respiratory support products, TCM physiotherapy products and warehousing and logistics services achieved revenue of 200 million yuan, 140 million yuan and 125 million yuan respectively, with a year-on-year increase of 26.44%, – 23.97% and 196.82%.
By improving its own production capacity, the company continuously optimizes its product structure, enriches product varieties and specifications, and improves the industry status of its own brand in the medium and high-end product line. As the production bases in Changsha and Xiangyin are put into operation, the company will further improve its production capacity and enhance its product market competitiveness and medium – and long-term profitability.
Deepen channel expansion and promote sustainable and stable development
The company has built three-dimensional marketing channels integrating large e-commerce platforms, large chain pharmacies and self operated stores. China tiktok Kwai’s sales of health care products are mainly online. The company has completed the layout of the third main business platforms of China, including Tmall, Jingdong, vip.com, jigsaw, fast hand, and the US group, and has 64 self operated shops, laying the mainstream online traffic entrance, and covering the online consumers in depth. In 2021, the sales revenue of online products was 1.482 billion yuan, a year-on-year decrease of 18.07%; The gross profit margin increased by 2.34 PCT to 44.36% year-on-year. ② Offline, the company has 11 storage malls, 359 “healthy ear hearing” hearing aid fitting centers and 15 “good nurse” medical device retail stores, and has established business cooperation with more than 60 chain drugstore top 100 enterprises, providing goods and services to more than 200000 drugstores across the country; The annual sales revenue of offline products was 647 million yuan, a year-on-year increase of 25.61%; Gross profit margin fell 4.90pct to 41.27% year on year.
Layout the listening business and build a chain brand of Chinese listening services
After more than ten years of exploration, the company has formed a mature business model and a complete operation management system including store location, store operation, commodity management, personnel training and performance appraisal. In 2021, the company focused on key target markets and set up 210 hearing aid fitting centers in 11 provinces and cities including Hunan, Shaanxi, Hainan and Guangxi. The total number of hearing aid fitting centers reached 359. The company continues to improve the operation management system, strengthen the management of new stores, and improve the performance of stores through new media channels, offline community promotion, promotion, advertising and other ways.
The sales expense ratio decreased, and the net interest rate increased by 1.00pct to 18.88%,
In 2021, the company’s comprehensive gross profit margin decreased by 3.01pct to 43.83% year-on-year; The sales expense ratio decreased by 3.84pct to 18.20% year-on-year, the management expense ratio increased by 0.43pct to 2.50%, the R & D expense ratio increased by 1.24pct to 3.10% year-on-year, and the financial expense ratio decreased by 0.04pct to -0.29% year-on-year; Under the comprehensive impact, the company’s overall net profit margin increased by 1.00pct to 18.88%.
In 2021, the net cash flow generated from the company’s operating activities was 240 million yuan, a year-on-year decrease of 51.59%, mainly due to: ① the proportion of commodities related to epidemic prevention in the previous year was relatively large, and the payment collection was fast; ② In this period, the company vigorously expanded offline channel sales and actively developed new customers, reducing the proportion of sales collection.
Profit forecast and investment rating: we expect the company’s operating revenue to be 2.998 billion yuan / 3.722 billion yuan / 4.522 billion yuan from 2022 to 2024, with a year-on-year growth rate of 32% / 24% / 21% respectively; The net profit attributable to the parent company was 558 million yuan / 687 million yuan / 827 million yuan, an increase of 30% / 23% / 21% respectively; EPS is 3.48/4.28/5.16 respectively, corresponding to 15 times PE in 2022 according to the closing price on April 22, 2022. For the first time, give a “overweight” rating.
Risk warning: the risk of New Coronavirus pneumonia outbreak; Risks of intensified industry competition; Risks of merger and acquisition integration and goodwill impairment; Industry policy risk.
