\u3000\u3 Guocheng Mining Co.Ltd(000688) 310 Maider Medical Industry Equipment Co.Ltd(688310) )
Key investment points
Event: 1) the company released] the annual report of 2021. The annual revenue was 320 million yuan (+ 19.9%), the net profit attributable to the parent company was 64.48 million yuan (+ 9.2%), the net profit not attributable to the parent company was 58.01 million yuan (+ 4.3%), and the net operating cash flow was 84.89 million yuan (+ 21.1%). 2) The company released the first quarterly report of 2022. The income of 22q1 was 52 million yuan (+ 10.9%), the net profit attributable to the parent was 2.4 million yuan (- 74.6%), the net profit not attributable to the parent was 1.49 million yuan (- 76.9%), and the net operating cash flow was – 24.3 million yuan (- 253.5%).
The performance in 2021 was in line with expectations, and 22q1 increased cost investment, resulting in short-term pressure on profits. 1) Quarterly, the revenue of 2021q4 in a single quarter was 120 million yuan (+ 23.6%), and the net profit attributable to the parent company in a single quarter was 25.2 million yuan (+ 255.1%). 2) From the perspective of profitability, the gross profit margin in 2021 was 50.1% (- 2.9pp), which was mainly due to the high gross profit margin of mask machine revenue in 2020, while the fourth rate of no mask machine revenue in 2021 was 30.7% (+ 7.1pp), which was mainly due to the increase of management expense rate, R & D expense rate and financial expense rate, and the final net profit attributable to the parent company was 20.4% (- 2PP). The decrease of Q1 profit in 2022 is mainly due to the company’s incentive amortization, patent expenses and R & D investment, resulting in the increase of management expense rate and R & D expense rate.
In 2021, the safe infusion business grew rapidly. In terms of business, in 2021, the revenue of safe infusion single machine was 130 million yuan (+ 221.4%), the gross profit margin was 52.7% (+ 11.9pp), the revenue of safe infusion connecting machine was 130 million yuan (+ 86.8%), and the gross profit margin was 46.1% (- 0.1pp). The high growth of safe infusion business revenue was mainly due to the strong demand for downstream covid-19 vaccine injector, which led to the increase of upstream equipment demand; In 2022q1, the revenue of blood purification single machine is 1.44 million yuan (- 24.6%), and the revenue of blood purification connecting machine is 1.69 million yuan (- 94.3%), which is expected to return to high growth in 2022. The company has become an important supplier of upstream intelligent equipment for safety infusion and blood purification consumables in China, with a total market space of about 3 billion yuan. With the advantages of cost performance and technology, the company is expected to continue to grow in the future.
R & D layout potential business, pre potting and insulin pen intelligent equipment are expected to provide new growth points. The barrier of medical consumables and intelligent equipment industry is relatively high, which is mainly reflected in “complex discipline technical background + non-standard products + rapid technological change”. The company attaches great importance to research and development. In 2021, the R & D investment was 38.46 million yuan (+ 46.6%), accounting for 12.2% of the receivable proportion. At present, the company has reserved consumables and intelligent equipment under research, such as medicine and machinery combination (pre potting and insulin pen), orthopedics, IVD and so on. The company cooperates strategically with Weigao group and holds 51% equity of Weigao automation. Later, it is expected to be deeply bound to become a supplier of consumables and intelligent equipment of Weigao. At the same time, it is expected that the pre potting production line is expected to sell and contribute to Weigao in 2022, becoming the first domestic enterprise to provide pre potting syringe intelligent equipment.
Profit forecast and investment suggestions. Without considering the incremental contribution of new business, the net profit attributable to the parent company from 2022 to 2024 is expected to be RMB 80 million, RMB 100 million and RMB 130 million respectively. The company is the leader of domestic medical consumables. Its existing business is growing steadily, and the volume of incremental business is imminent. It maintains the “buy” rating.
Risk warning: the order is not as expected, and the volatility risk of the investment cycle of the equipment industry
