\u3000\u30003 Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) 00244)
Event: on April 26, 2022, the company released the first quarterly report of 2022. In the first quarter of 2022, the company realized an operating revenue of 4.649 billion yuan, a year-on-year increase of 62.1%, and the net profit attributable to the parent was 754 million yuan, a year-on-year increase of 122.6%, deducting 748 million yuan of non attributable net profit, a year-on-year increase of 125.60%.
Conventional ICL services have achieved 20% rapid recovery, and covid-19 detection has contributed considerable performance. In 2022q1, the company’s diagnostic service business achieved a revenue of 2.849 billion yuan, a year-on-year increase of 103.04%, of which the revenue of conventional ICL business was about 968 million yuan, a year-on-year increase of 20.55%. The company’s conventional ICL business still achieved good performance under the conditions of continuous repetition of covid-19 epidemic and the incomplete recovery of diagnosis and treatment activities in China. At present, 34 laboratories have made stable profits, and we expect to see accelerated recovery after the epidemic; 22q1 covid-19 testing revenue is about 1.881 billion yuan, accounting for about 40.5% of the total revenue of 22q1. At present, China’s covid-19 prevention and control situation is still severe, and there is a strong demand for large-scale screening. The company’s covid-19 nucleic acid detection business is expected to continue to contribute to stable cash flow.
The growth rate of self-produced products exceeded 200%, and the channel agent products grew steadily. In the first quarter of 2022, the company’s self-produced product business realized a revenue of 371 million yuan, with a growth rate of 202.63%. In March 2022, the company’s new generation of high-end domestic clinical mass spectrometry detection system calquant-s was officially released, which greatly improved the company’s comprehensive competitiveness in the field of clinical mass spectrometry. At the same time, in 21 years, the company’s tacrolimus / cyclosporine A / rapamycin detection kit and other products were successively approved, With the help of the mature and complete channel sales network, the self-produced products can achieve accelerated volume. We expect that the company’s self-produced products business is expected to maintain rapid growth in the future; 22q1 channel agent products maintained a steady growth rate and achieved a revenue of 1.826 billion yuan, an increase of 21.13% over the same period last year.
The rapid expansion of revenue scale drives the continuous improvement of profit margin. 22q1 company’s sales expense ratio was 8.39%, with a year-on-year decrease of 0.66pp, management expense ratio of 6.49%, a year-on-year decrease of 0.57pp, R & D expense ratio of 2.47%, a year-on-year decrease of 0.16pp, financial expense ratio of 1.26%, a year-on-year decrease of 0.24pp, and the overall period expense ratio was 18.61%, with a year-on-year decrease of 1.63pp. Thanks to the continuous recovery of routine diagnosis business and the rapid growth of covid-19 testing products, the company’s period expense dilution effect was obvious, driving the overall profit margin, At the same time, the rapid volume of self-produced products also boosted the company’s profit margin. The net interest rate of 22q1 company was 19.72%, an increase of 5.34pp year-on-year.
Profit forecast and investment suggestions: it is estimated that the company’s revenue from 2022 to 2024 will be 15.961 billion yuan, 15.409 billion yuan and 16.517 billion yuan, with a year-on-year increase of 22%, – 3% and 7%; The net profit attributable to the parent company was 1.720 billion yuan, 1.650 billion yuan and 1.785 billion yuan, with a year-on-year increase of 48%, – 4% and 8%; The corresponding EPS is 2.77, 2.66 and 2.88 yuan. Considering the repeated outbreaks of the epidemic, it is expected that covid-19 testing revenue is expected to remain high, while conventional business is expected to continue to grow rapidly and maintain the buy rating.
Risk warning events: the risk of uncertain laboratory profit time, product development risk, accounts receivable management risk, covid-19 epidemic duration risk.
