\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 82 Guangzhou Wondfo Biotech Co.Ltd(300482) )
Event: on April 24, the company released its 2021 annual report and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of RMB 3.361 billion, a year-on-year increase of 19.57%, a net profit attributable to the parent company of RMB 634 million, a year-on-year increase of 0.04%, and a deduction of non net profit of RMB 551 million, a year-on-year decrease of 6.74%. 22q1 company’s revenue was 2.623 billion yuan, a year-on-year increase of 276.87%, the net profit attributable to the parent company was 904 million yuan, a year-on-year increase of 481.33%, and the non attributable parent company was 899 million yuan, a year-on-year increase of 535.50%.
In 2021, the growth rate of performance was steady, and covid-19 price adjustment affected the apparent profit. In 2021, thanks to the continuous recovery of conventional business outside China and the incremental contribution of covid-19 testing products, the company achieved steady growth as a whole. In the single quarter of 2021q4, the revenue was 854 million yuan, with a year-on-year increase of 33.90%. The net profit attributable to the parent company was 7.2 million yuan, with a year-on-year decrease of 89.45%. The deduction of non net profit was – 3.33 million yuan, with a year-on-year decrease of 109.64%. The profit in the single quarter decreased, mainly due to the price reduction of overseas covid-19 antigen detection products and the increase of cost investment. The rapid growth of 22q1 performance is mainly due to the repeated outbreaks in mainland China and Hong Kong and the surge in demand for antigen self-test related products.
The price reduction of overseas covid-19 products + amortization of share based payment led to the decline of profitability. The company’s sales expense ratio in 2021 was 19.17%, down 3.28pp year-on-year, mainly due to the dilution effect caused by the expansion of sales scale. The management expense ratio was 7.91%, up 1.19pp year-on-year, mainly due to the amortization of equity incentive plan expenses. The financial expense ratio was 1.46%, up 0.46pp year-on-year, mainly affected by the amortization of convertible bond interest. The R & D expense ratio was 11.64%, up 1.70pp year-on-year. In the second half of the year, the price of covid-19 antigen detection products in the European market decreased, resulting in a decrease in the overall gross profit margin. The gross profit margin of the company was 58.46%, a year-on-year decrease of 10.56pp, and the net profit margin was 18.82%, a year-on-year decrease of 3.12pp.
The growth rate of conventional business reached 38%, and the four product lines recovered rapidly. In 2021, the routine revenue of the company’s four product lines was about 1.916 billion yuan, with a year-on-year increase of 38.18%, mainly due to the continuous recovery of China’s medical order and the continuous expansion of overseas customers. According to the product lines: (1) chronic disease detection: the revenue in 21 years was 916 million yuan (+ 60.72%), the outpatient volume and sample testing demand of Chinese medical institutions recovered in 2021, and the chronic disease business ushered in a restorative growth. At the same time, with the good performance of covid-19 testing reagent, the overseas brand strength has been rapidly improved, the business channels have been greatly expanded, and the installed capacity of immunofluorescence has been rapidly increased, driving the rapid growth of conventional testing. (2) Infectious disease detection: the revenue from routine infectious disease detection in 21 years was 523 million yuan (+ 27.95%). After the impact of covid-19 epidemic, the bidding for conventional infectious diseases in overseas markets was gradually restarted, driving the rapid recovery of infectious diseases. At the same time, inflammatory factors are important covid-19 auxiliary diagnostic indicators in many overseas countries, realizing a significant growth; China’s COVID-19 prevention and control measures are complete, and the incidence rate of respiratory diseases has decreased overall, maintaining a steady growth. (3) Drug detection: the annual revenue of 21 years was 270 million yuan (+ 12.16%), and the covid-19 epidemic in the United States was severe in 2021. However, with the further enrichment of the company’s drug production line, we expect that it has returned to a rapid growth trend. (4) Pregnancy and eugenics testing: with an annual income of 207 million yuan (+ 23.86%) in 21 years, the company continues to accelerate product iteration, strengthen independent pregnancy brand building, and establish good cooperation with multiple e-commerce platforms and Internet hospitals. It is expected to achieve steady growth in the future.
Covid-19 business achieved a steady growth of nearly 10% in the past 21 years, and the liberalization of antigen self inspection in China is expected to bring sustained incremental performance. In 2021, the company achieved covid-19 detection reagent revenue of about 1.145 billion yuan, a year-on-year increase of 9.61%. The company’s covid-19 test reagent covers more than 100 countries overseas. With the mitigation of the global epidemic situation, covid-19 business has maintained a steady growth rate for 21 years. Since 22q1, sporadic outbreaks have occurred in Hong Kong and Mainland China, and the company’s antigen self-test product procurement has ushered in an outbreak. At present, the covid-19 epidemic situation in China is still tense. We expect that covid-19 business is expected to continue to contribute stable cash flow to the company in the future.
The growth rate of R & D investment was nearly 40%, and the layout of molecular, luminescence, pathology and other businesses was accelerated. In 2021, the company’s R & D expenses were 391 million yuan, a year-on-year increase of 39.96%. The company continues to increase investment in new platforms and technologies, and continues to launch a variety of heavy products. In 21 years, the company wholly acquired Tianshen medical, further expanded its layout in the field of chemiluminescence, launched a fully automatic immunohistochemical staining machine pa3600 in the field of Pathology, and developed a thromboelastograph tlt-101 in the field of hemagglutination. In addition, there are a variety of research projects such as immunofluorescence and molecular integrated machines, laying a solid foundation for the rapid growth of medium and long-term performance.
Profit forecast and Valuation: according to the annual report data, we adjusted the profit forecast. It is expected that covid-19 business is expected to continue to contribute to the performance, and the conventional business will gradually recover under the disturbance of covid-19. The operating revenue from 2022 to 2024 will be 5.711 billion yuan, 4.839 billion yuan and 5.345 billion yuan (+ 70%, – 15%, + 10%), and 3.975 billion yuan and 4.937 billion yuan from 22 to 23 years before adjustment; It is estimated that the net profit attributable to the parent company is RMB 1.478 billion, 1.055 billion and 1.178 billion (+ 133%, – 29%, + 12%), and RMB 987 million and 1.285 billion in the 22-23 years before adjustment.
Risk tips: the risk of new product R & D, registration and certification, policy change risk, exchange rate change risk, and the risk of information lag or untimely update of the public data used in the research report.
