\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Event overview
Annual report for the first quarter of 2021 and 2022:
In 2021, the company realized a revenue of 8.037 billion yuan, a year-on-year increase of – 35.87%; The net profit attributable to the parent company was 1.239 billion yuan, a year-on-year increase of – 67.48%. Among them, the revenue of 2021q4 company was 2.217 billion yuan, a year-on-year increase of – 26.35%; The net profit attributable to the parent company was 135 million yuan, with a year-on-year decrease of – 79.51%, mainly due to the high base in the same period of last year, the strong promotion of “double 11” activities and the increase of marketing expenses. If the standard 2019q4 is compared, the income and net profit attributable to the parent company will be + 52.30% and – 4.55% respectively. In terms of cash flow, the net cash flow from operating activities in 2021 was 872 million yuan, a year-on-year increase of – 81.72%, of which the net cash flow from Q4 operating activities was 441 million yuan, a year-on-year decrease of – 45.00%, which was mainly affected by the high base in the same period of last year.
In 2022q1, the company’s single quarter revenue was 2.322 billion yuan, a year-on-year increase of + 2.37%; The net profit attributable to the parent company was 357 million yuan, a year-on-year increase of – 25.69%. The profit side declined, mainly due to the impact of the high base in the same period of last year. Some high price orders signed by the company for export in the second half of 2020 were delivered in 2021q1, raising the overall profitability of 2021q1 and generating a high base. In terms of cash flow, the net cash flow from operating activities in 2022q1 was 397million yuan, a year-on-year increase of +111.45%. In addition, the company plans to distribute a cash dividend of 9.00 yuan (including tax) for every 10 shares.
Analysis and judgment:
Revenue side: consumer goods for healthy living grew steadily, and medical consumables business gradually returned to normal.
In terms of business, the sales of the company’s healthy living consumer goods and medical consumables business in 2021 were 4.054 billion yuan and 3.922 billion yuan respectively, with a year-on-year increase of + 15.27% and – 56.03% respectively, and the operating revenue accounted for 50.44% and 48.80% respectively. The healthy living consumer goods business benefited from the expansion of sales channels and the launch of new products, and the business scale increased steadily. Among them, the sales of cotton soft napkin products with a high revenue accounted for 963 million yuan in 2021, with a year-on-year increase of + 1.99%, Maintain a small growth, and the proportion in total revenue will increase from 7.53% in 2020 to 11.98% in 2021; The medical consumables business was affected by the return to normal of high base superimposed product prices in the same period of last year, with a significant year-on-year decline. Among them, the sales of disease control and protection products with high revenue accounted for 2.378 billion yuan in 2021, a year-on-year increase of – 66.09%, and the proportion in the total revenue decreased from 55.94% in 2020 to 29.58% in 2021.
In 2021q1, the company’s sales of healthy living consumer goods and medical consumables were 890 million yuan and 1.407 billion yuan respectively, with a year-on-year increase of + 8.76% and – 1.71% respectively, and the proportion of operating revenue was 38.33% and 60.59% respectively. Healthy living consumer goods still achieved steady growth under the background that the epidemic repeatedly affected the business and logistics of offline stores. It mainly benefited from the company’s new large supermarkets and other channels, and made efforts through its own platform official website and small programs.
Profit side: the profitability of 22q1 declined, and the expense rate remained basically stable during the period.
In 2021, the gross profit margin and net profit margin of the company were 49.88% and 15.40% respectively, with a year-on-year ratio of -9.67pct and -15.10pct respectively. Among them, the gross profit margin and net profit margin of Q4 single quarter were 52.07% and 6.02% respectively, with a year-on-year ratio of + 2.49% and -15.89% respectively. The profitability decreased, mainly because the price of medical consumables such as disease control and prevention products returned to normal, and the gross profit margin decreased. In terms of products, the gross profit margin of the company’s medical consumables and healthy consumer goods in 2021 was 47.50% respectively 52.24%, respectively -13.97 PCT and -2.96 PCT year-on-year, of which the gross profit margins of disease control and protection products and cotton soft towels with relatively high income proportion were 54.19% and 48.56% respectively, and -13.24 PCT and -4.33 PCT year-on-year respectively. In terms of period expense rate, the company’s period expense rate in 2021 was 32.77%, with a year-on-year increase of + 11.69pct, of which the sales expense rate, management expense rate, R & D expense rate and financial expense rate were 24.75%, 5.65%, 3.71% and – 1.34% respectively, with a year-on-year increase of + 12.18pct, + 2.17pct, + 0.43pct and – 3.08pct respectively. Quarterly, the expense rate in 2021q4 was 42.29%, with a year-on-year increase of + 22.72pct, of which the sales expense rate, management expense rate, R & D expense rate The financial expense ratio was 33.91%, 10.11%, 1.20% and – 2.92% respectively, with a year-on-year increase of + 26.76pct, + 4.30pct, – 1.11pct and – 7.23pct respectively. The expense ratio increased significantly during the period, mainly due to the low base in the same period of last year and the increase of marketing expenses caused by the company’s increase in “double 11” promotion activities.
In 2022q1, the gross profit margin and net profit margin of the company were 47.77% and 15.40% respectively, with a year-on-year decline of -6.91pct and -5.80pct respectively. The decline in profitability was mainly due to the impact of the high base in the same period of last year. In terms of period expense rate, the period expense rate of 2022q1 company was 28.88%, with a year-on-year increase of + 0.60pct, of which the sales expense rate, management expense rate, R & D expense rate and financial expense rate were 20.23%, 5.51%, 4.07% and – 0.93% respectively, with a year-on-year increase of + 2.94pct, – 1.25pct, – 0.31pct and – 0.78pct respectively. The period expense rate remained stable.
Investment advice
Winner Medical Co.Ltd(300888) takes “cotton” as the core and builds a strong moat through medical endorsement + high-quality products + Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channels. Considering the repeated impact of the epidemic, the contribution of the subsequent 55% equity acquisition of Longtai medical to the company will not be considered temporarily. The previous profit forecast will be lowered. The operating revenue of the company will be reduced from 10.585/12.359 billion yuan to 9.322/10.974 billion yuan from 2022 to 2023 respectively, and the EPS will be adjusted from 4.30/5.19 yuan to 3.17/3.74 yuan from 2022 to 2023 respectively. It is estimated that the operating revenue and EPS of the company in 2024 will be 12.660 billion yuan and 4.35 yuan respectively, corresponding to the closing price of 58.60 yuan / share on April 22, 2022, PE was 19 / 16 / 13 times respectively, maintaining the company’s “buy” rating.
Risk tips
The expansion of offline stores is less than expected; The demand for medical dressings fell sharply; Industry competition intensifies; The price of raw materials has increased significantly; The short-term epidemic has repeatedly affected.
