\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Event: in 2021, the company realized an income of 8.037 billion yuan, with a decrease of 35.87%, a net profit attributable to the parent of 1.239 billion yuan, with a decrease of 67.48%, a deduction of non net profit of 1.029 billion yuan, with a decrease of 72.57%, EPS of 2.91 yuan and a dividend of 9.00 yuan (including tax) for every 10 shares. Affected by the return of prices and sales of epidemic prevention materials to normal, the company’s performance fell year-on-year, and its main business achieved significant growth compared with 2019 before the epidemic. The income of 2022q1 company was 2.322 billion yuan, with a same increase of 2.37%, the net profit attributable to the parent company was 357 million yuan, with a same decrease of 25.69%, the net profit deducted from non net profit was 328 million yuan, with a same decrease of 27.89%, which was improved compared with 2021q4. The income volume and performance base of epidemic prevention materials of 2021q1 company were higher.
Comments:
The income of epidemic prevention materials returned to normal, and the income of high-end dressings increased rapidly. In 2021, the company’s medical consumables revenue was 3.922 billion yuan, a decrease of 56.03%. 1) In terms of products, traditional wound dressings, high-end wound dressings, operating room infection control products, disease control and protection products, disinfection and cleaning products achieved revenue of 722 million yuan, 107 million yuan, 434 million yuan, 2.378 billion yuan and 282 million yuan, an increase of – 4.93%, 23.04%, – 37.19%, – 66.09% and – 24.35% respectively. The supply of epidemic prevention related products increased and the price decreased, and the company’s product revenue decreased year-on-year, The recognition of overseas customers of high-end wound dressing products has improved, and the revenue has continued to grow year-on-year. 2) In terms of channels, the revenue of medical consumables export, Chinese hospitals and China’s C-end channels was 1.69 billion yuan, 1.25 billion yuan and 1.01 billion yuan, with the same increase of – 71.7%, 12.5% and 3.0%. The export revenue of epidemic prevention materials decreased, the number and revenue of hospitals covered in China increased rapidly, and the revenue of e-commerce channels such as tmall, jd.com and applet increased rapidly. By the end of 21, the cumulative number of fans of e-commerce platforms was 9.25 million.
The income of healthy consumer goods increased, and the income of offline and shopping malls increased rapidly. In 2021, the income of healthy consumer goods was 4.054 billion yuan, an increase of 15.27% at the same time. 1) In terms of products, the income of cotton soft towels, sanitary napkins, wet towels, other non-woven consumer goods, baby and children’s products, baby and children’s clothing, adult clothing and other textile consumer goods was 963 million yuan, 548 million yuan, 177 million yuan, 447 million yuan, 362 million yuan, 509 million yuan, 680 million yuan and 367 million yuan, an increase of 1.99%, 31.69%, – 16.60%, – 25.46%, 30.16%, 38.77%, 51.92% and 46.05% respectively, and the company’s sanitary napkin products were upgraded The expansion of sales channels promoted revenue growth. The competition of products such as masks and wipes intensified, the revenue decreased year-on-year, and the competitiveness of infant and child products and clothing products improved. The company strengthened its marketing and digital operation capabilities to promote revenue growth. 2) By channel, the revenue of e-commerce, offline stores, supermarkets and key customers in 2021 was 2.541 billion yuan, 1.235 billion yuan, 203 million yuan and 748886 million yuan, an increase of 8.69%, 29.34%, 51.18% and – 16.57% respectively. At the end of 2021, the company had 322 and 23 offline Direct stores and franchise stores, with an increase of 18.82% and 360.00% respectively. The average store efficiency of Direct stores increased by 25.44% in 2021, driving the growth of offline store revenue. The company expanded the number of cooperative shopping malls and product categories, and promoted the rapid increase of the income of supermarkets.
The gross profit margin decreased, the expense rate increased, and the stock of raw materials increased. 1) In 2021, the gross profit margin of the company decreased by 9.67 PCT to 49.88%, and the gross profit margin of medical consumables and healthy consumer goods decreased by 13.97 PCT, 2.96 PCT to 47.50% and 52.24%, mainly due to the decline in the price of epidemic prevention materials and the increase in the production cost of cotton. In 2022q1, the gross profit margin of the company decreased by 6.91pct to 47.77%. 2) In 2021, the company’s sales, management, R & D and financial expense rates were 24.75%, 5.65%, 3.71% and – 1.34%, with the same increase of 12.18pct, 2.16pct, 0.43pct and – 3.08pct. The increase of the company’s interest income and the decrease of exchange loss led to the decrease of the financial expense rate, and the sharp decrease of the income of epidemic prevention materials led to the increase of other expense rates. 3) At the end of 2021, the company’s inventory was 1.597 billion yuan, with a 31.31% increase, and the inventory turnover days were 126 days and 47 days, mainly due to the strategic reserve of cotton and other raw materials in the healthy consumer goods business.
The income of epidemic prevention materials stabilized, and medical consumables strengthened their leading edge. Affected by the falling price of epidemic prevention materials and sufficient market supply in 2021, the income of medical consumables of the company decreased significantly. In 2022, China’s Omicron continued to spread, the demand for epidemic prevention products increased rapidly, and the income of epidemic prevention materials of the company is expected to stabilize gradually. The company’s medical consumables business continues to improve its R & D advantages, and cooperates with Suzhou University, Wuhan Textile University, Chinese Academy of Sciences and other institutions to conduct research on yarn and wound repair materials. The company develops product layout, develops silica gel foam dressing, hydrocolloid dressing and other high-end products, and provides comprehensive solutions to customers to meet one-stop procurement needs. The company continued to expand sales channels such as exports, Chinese hospitals and China’s C-end, continuously improved its brand influence, strengthened its leading advantage through extension mergers and acquisitions, and promoted the income growth of the medical sector.
The health consumer goods business has developed in all channels, and the income growth rate is expected to increase after the epidemic is controlled. The company actively develops the interest business platform such as jowl and Xiao Hong, and expands the channel of WeChat small program. It expands the direct outlets and opens up the alliance under the line, and strengthens cooperation with tiktok to promote revenue growth. In terms of products, the company has accelerated the research and development of new products, focusing on creating popular products such as sanitary napkins, face towels and cotton soft towels, so as to enhance the competitive advantage of products. In 2022q1, the company’s revenue from healthy consumer goods reached 890 million yuan, an increase of 8.76% at the same time, of which the revenue still increased by 14% under the influence of the epidemic, but the revenue of third-party e-commerce decreased by 8% due to logistics restrictions. With the gradual control of the epidemic in 22q2 China, the company’s consumer goods business is expected to achieve rapid growth.
Profit forecast and investment rating: due to the impact of 2022q1 epidemic on the performance of short-term consumer goods business, we lowered the EPS forecast for 202223 to 3.35/4.23 yuan (the original value was 3.61/4.97 yuan), and the EPS forecast for 2024 to 5.12 yuan. At present, the stock price corresponds to 17.49 times PE in 22 years. After 2021q2, the company’s performance has gradually returned to the normal level and the base has decreased. We are optimistic about the stabilization of the company’s medical dressing business income and the growth of health consumption business income. The merger and acquisition of Longtai medical is expected to be completed in 22q3. In the future, the company is expected to acquire more high-quality medical targets. At present, the company’s stock price is at a low position and maintains the “buy” rating.
Risk factors: reduced demand for downstream epidemic prevention supplies, rising prices of raw materials, increased losses from exchange rate fluctuations, intensified industry competition, etc.
