\u3000\u3 Guocheng Mining Co.Ltd(000688) 029 Micro-Tech (Nanjing) Co.Ltd(688029) )
Key investment points
Event: on April 25, the company released its 2021 annual report and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 1.947 billion yuan, a year-on-year increase of 46.77%, a net profit attributable to the parent company of 325 million yuan, a year-on-year increase of 24.54%, and a deduction of 276 million yuan of non net profit, a year-on-year increase of 29.71%. The net profit attributable to the parent company was 4.293 billion yuan, a year-on-year decrease of 4.234 billion yuan, and the net profit attributable to the parent company was 4.234 billion yuan, a year-on-year decrease of 4.234 billion yuan
The rapid volume of endoscopic consumables in 21 years has put pressure on the short-term performance under the disturbance of 22q1 epidemic. After excluding the impact of share based payment and taxes, the net profit attributable to the parent company in 21 years was 393 million yuan, with a year-on-year increase of 46.29%. The annual performance increased rapidly, mainly due to the rapid volume of a full range of endoscopic consumables such as the alleviation of the epidemic situation outside China, the hemostasis and expansion after the recovery of hospital surgery. In the single quarter of 2021q4, the revenue was 558 million yuan, with a year-on-year increase of 41.06%. The net profit attributable to the parent company was 76.22 million yuan, with a year-on-year increase of 45.67%. The net profit deducted was 67.75 million yuan, with a year-on-year increase of 31.70%. The growth trend of endoscopic consumables products recovered significantly. 22q1 covid-19 epidemic has been repeated in many places in China, and endoscopic surgery and routine examination activities have been affected. At the same time, the overall revenue growth in the European market has slowed down due to geopolitics, transition and adaptation of sales mode switching and other factors.
Product price, freight, exchange rate change, share based payment and other factors affect the company’s profit margin. In 2021, the company’s sales expense ratio was 19.96%, a year-on-year decrease of 1.03pp, mainly due to the dilution of expenses caused by the expansion of the company’s sales scale. The management expense ratio was 17.76%, a year-on-year increase of 0.96pp, mainly due to the amortization of equity incentive plan expenses. The financial expense ratio was 1.07%, a year-on-year decrease of 0.10pp, and the R & D expense ratio was 7.85%, a year-on-year increase of 0.34pp. In 2021, affected by factors such as falling product prices, exchange rate fluctuations and rising transportation costs, the company’s gross profit margin was 64.18%, with a year-on-year decrease of 1.84pp and net profit margin of 16.92%, with a year-on-year decrease of 3.15pp.
Six categories of endoscopic products have recovered rapidly, and visual products have entered the harvest period. With the gradual relief of the epidemic situation outside China, the company’s six major endoscopic consumables products have been in rapid volume, of which (1) the sales volume of trap and cold trap products is + 57.53 million yuan, and the income of ESD electric knife is + 20.98 million yuan, driving the high growth of EMR / ESD products by 66.13%; (2) The sales volume of microwave ablation needles reached 65000, achieving a bright growth rate of 58.87%; (3) The sales volume of hemostatic clips exceeded 10 million, contributing 838 million in sales revenue, which is the core growth power of hemostatic closure business (+ 53.10%). In 2021, the company’s revenue from visualization products was 9.75 million yuan, mainly from the rapid volume after the listing of disposable choledochoscope. The sales of visualization products of 22q1 company was 455834 million yuan, accounting for 10.31% of the revenue. It is expected to create the second growth curve of the company’s performance in the future.
The clinical application of disposable choledochoscope has exceeded 800 cases in 21 years, and a variety of heavy products are expected to be approved in 22 years. In November 2021, the company’s primary choledochoscope was highly praised by clinicians after it was listed in China. In 21 years, more than 800 clinical trials have been completed under the disturbance of multiple epidemic situations. After the epidemic situation is alleviated in the future, the disposable choledochoscope is expected to accelerate its admission to the hospital and contribute considerable performance to the company. At the same time, many core products of the company are expected to be on the market in 2022, including new visual products, disposable bronchoscope (FDA, CE, nmpa certificate), disposable visual brain irrigation system (FDA certificate), EUS flex needle (nmpa, CE certificate), etc. it is expected to start rapid discharge in 2023; In addition, a number of innovative products such as intracranial tunnel distraction surgery system, disposable biopsy needle, microcatheter and micro wire guide system are also being developed and registered as planned, providing sufficient impetus for the medium and long-term performance growth of the company.
Profit forecast and Valuation: according to the annual report and quarterly report data, we adjusted the profit forecast. It is expected that the repeated covid-19 epidemic may affect the entry of the company’s endoscopic products in the short term. The operating revenue from 2022 to 2024 was RMB 2.349 billion, RMB 3.116 billion and RMB 4.045 billion (+ 21%, 33% and 30%), and RMB 2.512 billion and RMB 3.263 billion in the previous 22-23 years; It is estimated that the net profit attributable to the parent company is 448, 661 and 844 million yuan (+ 38%, 48% and + 28%), 481 and 672 million yuan in the 22-23 years before adjustment, corresponding to EPS of 335, 494 and 631. Considering the low localization rate of the company’s minimally invasive diagnosis and treatment equipment industry, the company is a leading enterprise in China with strong scarcity. The listing of new products such as disposable choledochoscope is expected to accelerate the performance, so we maintain the “buy” rating.
Risk tips: the risk of industrial policy changes, the risk of covid-19 epidemic persistence, the risk of intensified market competition, and the risk of delayed information or untimely update of the public data used in the research report.
