\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Recently, the company released the annual report of 2021 and the first quarter report of 2022. In 2021, the company’s revenue, net profit attributable to the parent and net profit deducted from non attributable to the parent decreased by 35.87% / 67.48% / 72.57% year-on-year respectively. In 2022q1, the company’s revenue, net profit attributable to the parent and net profit deducted from non attributable to the parent increased by + 2.37% / – 25.69% / – 27.89% year-on-year respectively. The performance was lower than expected mainly due to the high base + normalization of the demand for medical protective articles, the return to normality of the sales of protective products in 2021, and the rise of sea freight and energy prices pushing up the production cost.
Product side: the sales of disease control and protection products fell, and sanitary napkins and textile consumer goods performed strongly.
During the reporting period, the operating income of medical consumables and healthy living consumer goods in the two sectors of the company changed by – 54.84% and + 15.27% year-on-year respectively. The former is caused by the decline in the sales of core products, disease control and protection products, while the latter is caused by the upgrading of sanitary napkins and textile products. Based on this, the proportion of sales revenue structure of the two sectors has changed greatly: from about 70% and 30% of revenue in 2020 to 48.80% and 50.44% in 2021.
From the perspective of medical consumables, the revenue of most products in this sector decreased, among which the sales revenue of disease control and protection products, operating room infection control products and disinfection and cleaning products decreased by 66.09% / 37.19% / 24.35% year-on-year respectively, which was mainly affected by the epidemic situation and market supply and demand fluctuations. Only high-end wound accessories in this sector performed well, with a sales revenue of 106 million yuan. The sales revenue and gross profit margin increased by 23.04% and 8.97% respectively year-on-year, due to the increased demand in overseas markets.
From the perspective of consumer goods for healthy living, due to product upgrading, sanitary napkins and textile consumer goods increased significantly, and the sales revenue changed by + 31.69% / + 99.55% year-on-year respectively. However, due to the increase of cost (+ 44.62% / + 110.21%) due to sea freight price factors, the gross profit margin decreased, with a year-on-year change of – 3.20% / – 2.35% respectively. The revenue of cotton soft towel increased slightly, with a year-on-year increase of 1.99%, and the gross profit margin decreased by 4.33%. Due to the low price competition and inventory backlog in the market, the revenue of wet wipes and other non-woven consumer goods dominated by masks was under pressure. The revenue decreased by 16.60% and 25.46% respectively year-on-year, and the gross profit margin decreased by 4.53% and 10.26% year-on-year. The inventory of masks was 602914800 pieces, a year-on-year increase of 109.97%, and the capacity utilization rate decreased by 20.17% year-on-year, which was caused by the increase of capacity investment and the decline of mask demand.
In terms of unit price and single piece cost, the average unit price of sanitary napkins in 2021 was 0.80 yuan and the single piece cost was 0.29 yuan, an increase of 8.47%% / 19.12% respectively over the same period last year; In 2021, the average unit price of cotton soft towels was 5.38 yuan, and the single piece cost was 2.77 yuan, with a year-on-year change of – 0.50% / + 8.80% respectively.
Channel side: structural changes of business in domestic and overseas markets, and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) deep integration.
During the reporting period, foreign income and gross profit margin decreased by 71.67% and 15.49% respectively year-on-year. The proportion of regional sales revenue structure of medical consumables business has changed: the domestic and foreign markets have changed from about 60% and 40% of medical business revenue before the epidemic to 40% and 60% in 2021, respectively, because the purchase of medical consumables by foreign customers returned to normal in 2021.
In 2021, 81 offline stores (including 63 Direct stores and 18 franchise stores) were added. The sales revenue of offline stores increased by 29.34% year-on-year, of which the sales of stores opened for more than two years increased by 14.97% year-on-year. Online revenue accounted for more than 30%. The sales revenue of e-commerce channels was 2.541 billion yuan, a year-on-year increase of 8.69%. As of the end of the reporting period, the cumulative number of fans of China’s e-commerce platforms was 9.25 million. In the cotton era, the number of global members exceeded 35 million, including 16.84 million private members, a year-on-year increase of 31.97%.
In 2022q1, the revenue increased slightly, among which the business supermarket channel increased significantly.
In 2022q1, the company’s operating revenue was 2.322 billion yuan, a year-on-year increase of 2.37%, and the net profit attributable to the parent was 357 million yuan, a year-on-year decrease of 25.69%. After excluding equity incentive expenses, the net profit attributable to the parent increased by 66.55% compared with Q4 in 2021.
The sales structure of the medical sector at home and abroad changed, with overseas sales of 327 million, and its revenue decreased by 47.66% year-on-year. In the healthy consumer goods sector, due to the Limited Logistics under the background of the epidemic, the revenue of third-party e-commerce decreased by 8.01% year-on-year. Supermarket channels increased by 45.48% year-on-year in the first quarter of last year, mainly due to the company’s addition of more than 380 large supermarkets and more than 4000 outlets.
High end wound dressing products are expected to become a new growth point.
The company’s future third-generation bioactive dressings are in the stage of accelerated research and development. In April 2022, the company acquired 55% equity of Longtai medical, which is expected to be included in the consolidated statements in the third quarter of 2022. It is expected that the sales and market share of high-end wound dressing products will be further improved in the future.
Investment suggestion: we estimate that the operating revenue of the company from 2022 to 2024 will be 9.457 billion yuan, 11.073 billion yuan and 12.802 billion yuan respectively, and the net profit attributable to the parent company will be 1.46 billion yuan, 1.638 billion yuan and 1.997 billion yuan, corresponding to PE of 15.8x, 14.07x and 11.55x. Give a “buy” rating.
Risk tips: epidemic fluctuation risk, raw material price fluctuation risk and exchange rate fluctuation risk.
