\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 763 Topchoice Medical Co.Inc(600763) )
Event: on the evening of April 27, 2022, the company released its annual report for 2021. During the reporting period, the company achieved a revenue of RMB 2.781 billion, a year-on-year increase of 33.19%, and a net profit attributable to the parent company of RMB 703 million, a year-on-year increase of 42.67%. Among them, Q4 achieved a revenue of 644 million yuan, a year-on-year increase of 6.34%, and a net profit attributable to the parent company of 83 million yuan, a year-on-year decrease of 10.87%
Meanwhile, the company released the first quarterly report of 2022. During the reporting period, the company achieved a revenue of 655 million yuan, a year-on-year increase of 3.74%, and a net profit attributable to the parent company of 166 million yuan, a year-on-year increase of 1.25%
Affected by the repeated epidemic and personnel reserve in advance, the performance of 21q4 and 22q1 is under pressure, but the overall profitability remains high. The performance of Q4 in 2021 and Q1 in 2022 was under pressure, and the net profit attributable to the parent decreased by 10.87% and increased by 1.25% respectively year-on-year. We believe that it is mainly due to the sporadic outbreak of the epidemic in the company’s key business areas since Q4 last year and the tightening of local epidemic prevention policies, resulting in the obvious restriction of hospital passenger flow. In addition, the company’s reserve for the expansion of new hospitals was still higher than that for the opening of new hospitals, which led to a large number of losses.
In terms of profitability, in 2021, the company achieved a gross profit margin of 46.06%, a year-on-year increase of 0.89pct, a period expense rate of 13.15%, a year-on-year decrease of 1.36pct, a net profit margin of 28.27%, a year-on-year increase of 2.17pct, and its profitability continued to improve. In 2022q1, the gross profit margin was 46.75%, a year-on-year decrease of 0.77pct, the period expense rate was 13.42%, a year-on-year increase of 0.13pct, the net profit margin was 29.07%, a year-on-year decrease of 0.58pct, and the profitability remained high.
The performance of the general hospital in the province is stable, the growth of branches is strong, and the market outside the province continues to be cultivated. In 2021, the company’s general hospital in the province, branch hospitals in the province and hospitals outside the province achieved revenue of 732 million yuan (+ 21%), 1.642 billion yuan (+ 36%) and 260 million yuan (+ 30%) respectively. The number of outpatient visits was 680000 person times (+ 15%), 1.75 million person times (+ 35%), 370000 person times (+ 23%), and the unit price of customers in the general hospital in the province was 1076 yuan / person (+ 5.1%). The passenger unit price of the general hospital in the province continues to increase, and the growth of branches in the province mainly comes from the growth of passenger flow. The development model of “regional general hospital + branches” is constantly verified. In addition, Wuhan cunji hospital achieved 109000 outpatient visits in 2021, with a year-on-year increase of 82% and a year-on-year increase of 63% in revenue, achieving a break even. The business situation of Xi’an cunji hospital was better than that of Wuhan cunji in the same period, and the market outside the province continued to be cultivated.
In 2022q1, the income of the market in the province was 567 million yuan (+ 4.26%), and the income of the market outside the province was 55 million yuan (- 9.5%).
In terms of business, the five business segments have achieved steady growth. In 2021, the company achieved revenue of 441 million yuan (+ 38%), 534 million yuan (+ 30%), 530 million yuan (+ 32%), 430 million yuan (+ 25%) and 680 million yuan (+ 31%) from planting, orthodontics, pediatrics, prosthetics and comprehensive businesses respectively. The five business segments achieved balanced and rapid growth.
In 2022q1, the company achieved revenue of 102 million yuan (+ 12.7%), 124 million yuan (+ 4.03%), 127 million yuan (+ 0.32%), 96 million yuan (+ 2.78%) and 174 million yuan (+ 0.44%) in planting, orthodontics, pediatrics, prosthetics and comprehensive business respectively, with outstanding performance in planting business.
The construction of dandelion branch and new general hospital has been steadily promoted, laying the foundation for the long-term development of the company. In 2022, the company expects to invest 900 million yuan in the construction of dandelion branch, central Zhejiang general hospital, Chengxi new general hospital, Zijingang hospital and Binjiang hospital. Zijingang hospital, Chengxi new general hospital and Binjiang hospital are expected to be put into use in 2022, and more than 10 dandelion branches such as Xinchang and Cixi will enter the construction stage. The operation of the new hospital laid a stable foundation for the long-term development of the company.
Profit forecast: the company is the leader of oral medical services in Zhejiang Province. The development model of “regional general hospital + branch hospital” has been preliminarily verified in the province and will make a breakthrough outside the province. We expect the net profit attributable to the parent company in 22-24 years to be 804 / 1044 / 1329 million yuan respectively, corresponding to 49 / 38 / 30 times of PE respectively, maintaining the “buy” rating.
Risk warning: the expansion progress of the hospital is less than expected; Industry competition intensifies; Malignant medical malpractice; Covid-19 pneumonia epidemic situation is repeated.
