\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Core view
Protective products returned to normal, and the annual performance decreased by 67.5% year-on-year. The price and demand of global protection products returned, and the company's annual operating revenue was 8.04 billion yuan, a year-on-year decrease of 35.9%; The net profit attributable to the parent company was 1.25 billion yuan, a year-on-year decrease of 67.5%. In terms of business, under the high base of medical business, the revenue decreased by 54.8% year-on-year; The revenue of consumer goods business increased by 15.3% driven by new stores and online multi platform operation. Due to the increase of marketing investment and the withdrawal of share based payment expenses, the expense rate increased and the profit margin decreased during the period. Under the background of rising raw material prices, strategic stock increased and inventory turnover slowed down.
In the first quarter, under the influence of the epidemic and high base, revenue still achieved positive growth, and private domain traffic grew strongly. The revenue base of medical business in the first quarter of 2021 was relatively high, mainly because some high price orders signed in 2020 were delivered in the first quarter of 2021, and the base returned to normal in the second quarter. In the first quarter of 2022, the revenue was 2.32 billion, an increase of 2.4%; The net profit attributable to the parent company was 350 million, a decrease of 25.7%. In terms of business, the medical business decreased slightly, mainly due to the large decline under the high base of overseas income, but the domestic income increased strongly due to the improvement of China's popularity and the higher coverage of hospitals and chain stores; The revenue of consumer goods business increased by 8.8% year-on-year, mainly driven by offline stores, supermarkets and self owned e-commerce channels. Among e-commerce channels, the growth of self owned channels offset the decline of third-party e-commerce platforms. Self owned channels / other e-commerce platforms increased by 29.4% year-on-year and decreased by 8.0% year-on-year respectively.
Business outlook: Medical + consumer products have significant advantages and great potential for channel expansion. In terms of medical business, the company acquired Longtai medical and jointly expanded the high-end dressing business. After the acquisition of Longtai medical, the company's product end has been well supplemented, and the channel end is expected to empower Longtai to promote high gross profit products. In terms of consumer goods business, intensive cultivation of products and channels will reduce costs and increase gross profit margin in 2022. The company opened up Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channels, formed complementary advantages, and further improved its operating efficiency and performance.
Risk warning: repeated epidemic, downward consumer demand; International political and economic risks; Fierce market competition
Investment suggestion: be optimistic about the inflection point of short-term performance and long-term growth space, and maintain the "buy" rating. As the epidemic prevention and control entered the new normal, the sales price of the company's protective products returned to rationality, and the drainage effect of protective articles on consumer goods also weakened. In the long run, the medical business has strong advantages in products, channels and scale, which has been further strengthened after the acquisition of Longtai medical; In terms of consumer goods business, we continue to launch new products, refine channels and increase brand publicity, which gradually highlights the growth potential in the future. However, during the period of expanding market share, consumer goods face fierce market competition and potential epidemic impact, and the gross profit margin is at risk of decline. Considering that the epidemic and logistics will have a certain impact on the consumer goods business in the first quarter in the short term, we slightly reduced the profit forecast. It is estimated that the net profit from 2022 to 2024 will be 1.45/17.4/2.07 billion yuan respectively (originally 1.64/1.97 billion yuan), 16.8% / 20.1% / 18.9% respectively year-on-year, and EPS will be 3.39/4.08/4.84 yuan respectively. The current stock price corresponds to PE 17.8x/14.8x/12.5x. Due to the reduction of profit forecast, the reasonable valuation will be reduced to 86-90 yuan (2023 PE 21-22x), Maintain the "buy" rating.
