\u3000\u3 Shengda Resources Co.Ltd(000603) 882 Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) )
Key investment points
Event: on April 26, 2022, the company released the 2021 annual report and the first quarterly report of 22 years. In 2021, the company realized an operating revenue of 11.943 billion yuan, a year-on-year increase of 44.88%; The net profit attributable to the parent company was 2.22 billion yuan, a year-on-year increase of 47.03%; Net profit deducted from non parent company was RMB 2.189 billion, with a year-on-year increase of 50.18%. 22q1 company’s revenue was 4.251 billion yuan, a year-on-year increase of 58.70%, the net profit attributable to the parent was 850 million yuan, a year-on-year increase of 58.00%, and the net profit not attributable to the parent was 837 million yuan, a year-on-year increase of 57.84%.
The performance exceeded expectations and the revenue and profit increased rapidly. The rapid growth of the company’s performance in 21 years is mainly due to the good recovery of conventional ICL and the continuous contribution of covid-19 nucleic acid business; 21q4 achieved an operating revenue of 3.326 billion yuan, a year-on-year increase of 37.64%, a net profit attributable to the parent of 547 million yuan, a year-on-year increase of 20.37%, deducting a net profit not attributable to the parent of 541 million yuan, a year-on-year increase of 23.54%. The growth rate of Q4 profit was slightly lower than that of revenue, mainly due to the natural decline of covid-19 test price. 22q1 the epidemic situation in many parts of the country is repeated, and the factors of returning home and returning to work during the Spring Festival are superimposed. There is a strong demand for nucleic acid screening, which contributes considerable income to the company.
In 21 years, the growth rate of routine business was about 30%, and the proportion of special inspection was more than 50%. In 2021, the order of Chinese hospitals has been restored and the demand for sample testing has increased. We expect that the company’s conventional business may achieve an increase of nearly 30%, of which the special inspection business accounts for 50.45% of the conventional ICL, driving the development of the company’s overall business to the high-end level. From the perspective of sub sectors, the four major diseases all performed brilliantly. The solid tumor series increased by 45.87% year-on-year, the revenue of blood disease series increased by 31.90%, the neurological and clinical immune disease series increased by 38.21% year-on-year, and the infectious disease series increased by 34.81% year-on-year; We expect that in the future, with the gradual recovery of terminal diagnosis and treatment passengers, the company’s routine inspection business is expected to maintain a rapid growth trend. In terms of development strategy, in 2021, the company continued to promote the “indomitable” business model, increased cooperation with top-level tertiary hospitals based on 39 self built laboratories, radiated the grass-roots service network and continuously expanded its coverage; At the same time, the company’s cooperative construction of laboratory business has grown rapidly. At present, there are 670 cooperative construction and operation projects, and more than 150 new projects have been added in 21 years. It may become an important driving force for the growth of medical examination business in the future.
Covid-19 large-scale screening achieved an income of about 1.8 billion yuan, which may continue to contribute to stable cash flow in the future. In 2021, the company’s large-scale covid-19 screening revenue is about 1.8 billion yuan. We expect that the covid-19 revenue may exceed 4 billion yuan in 21 years; The company continues to optimize the detection operation efficiency, and the detection speed of covid-19 has increased by more than 50%. At present, the prevention and control situation of covid-19 in China is still severe, and the demand for multi scenario screening is frequent. The company’s covid-19 nucleic acid detection business is expected to continue to contribute to stable performance.
3000 + diagnostic projects rank first in China’s ICL industry and continue to improve the professionalism and influence of multidisciplinary clinical services. The company has always adhered to the innovation driven strategy and increased the promotion of project R & D and discipline layout with disease diagnosis as the demand. (1) In terms of test items, the company currently has 75 types of test technologies, more than 3000 test items and 257 new development projects in 21 years, so as to further improve the ability of disease detection and service; (2) In terms of discipline construction, the company adheres to academic guidance and strengthens the strategic cooperation of top resources. In 2021, the company launched 22 new industry university research cooperation, joined 20 national disease alliances and platforms, and gathered various forces to consolidate the development foundation of medium and long-term diagnosis business; (3) In terms of R & D investment, the company continued to promote technological research and increased R & D investment. In 2021, the company’s R & D expenditure was 518 million yuan, a year-on-year increase of 30.40%.
Profit forecast and investment suggestions: according to the data of the annual report and quarterly report and combined with the current epidemic progress, we adjust the profit forecast. It is expected that covid-19 nucleic acid detection will contribute stable performance to the company. It is expected that the company’s revenue from 2022 to 2024 will be 13.771, 12.260 and 13.968 billion yuan, with a year-on-year increase of 15%, – 11% and 14% (11.305 and 12.214 billion yuan in the 22-23 years before adjustment), and the net profit attributable to the parent company will be 2.541, 1.949 and 2.288 billion yuan, Year on year growth of 14%, – 23% and 17% (RMB 1877 and 1.923 billion in 22-23 years before adjustment), corresponding to EPS of 545, 418 and 491. Considering that the company, as an industry leader, is expected to directly benefit from the rapid development of the industry, covid-19 testing service is expected to continue to bring increment, the profitability of the laboratory continues to improve and maintain the “buy” rating.
Risk warning events: the risk that the profit time of the laboratory does not meet the expected risk, the risk of quality control, the risk of uncertain covid-19 duration, etc.
