\u3000\u3 Shengda Resources Co.Ltd(000603) 387 Getein Biotech Inc(603387) )
Event: the company released the annual report of 2021 and the first quarterly report of 2022: in 2021, the company achieved a revenue of 1.402 billion yuan, a year-on-year increase of 24.78%; The net profit attributable to the parent company was 399 million yuan, a year-on-year increase of 30.93%; Net profit after deduction of non return to parent was 368 million yuan, with a year-on-year increase of 49.35%. In the first quarter of 2022, the company achieved a revenue of 571 million yuan, a year-on-year increase of 106.80%; The net profit attributable to the parent company was 219 million yuan, a year-on-year increase of 249.06%; Net profit after deduction of non return to parent was 220 million yuan, with a year-on-year increase of 245.95%.
Event comments:
The revenue of each product line increased rapidly, and the installation of instruments advanced steadily. In 2021, the company’s in vitro diagnosis business realized a revenue of 1.07 billion yuan, with a year-on-year increase of 66.76%, of which the reagent revenue was 984 million yuan, with a year-on-year increase of 64.52%, and the instrument revenue was 86 million yuan, with a year-on-year increase of 97.44%, mainly due to the increase in the sales of self-produced products and the increase in the new installation of instruments. The company’s self-produced products include POCT, biological immunity, hemagglutination and covid-19 testing reagents. From the perspective of product line, POCT product line achieved an operating revenue of 923 million yuan in 2021, with a year-on-year increase of 62.22%. The installed capacity of POCT instruments exceeded 3500, including 1100 star products getein1600 and 6000 since listing; The production and exemption line achieved an operating income of 958607 million yuan, an increase of 76.49% year-on-year. There were more than 500 sets of production and exemption testing and chemiluminescence instruments installed; Hemagglutination business achieved an operating income of 404214 million yuan, a year-on-year increase of 107.29%. The revenue from testing business and other agency business was 55 million yuan and 273 million yuan respectively, with a year-on-year decrease of 2.3% and 35.26% respectively.
Continue to increase R & D investment, and new products have been introduced to the market. In 2021, the company invested 187 million yuan in R & D, a year-on-year increase of 38.35%, accounting for 13.34% of operating revenue. Metis600 emergency blood cell assembly line, magicl6000 automatic chemiluminescence analyzer, getein208 portable biochemical immunoanalyzer and other new products have been successively introduced to the market. Among them, metis600 emergency blood cell assembly line is the first five classification blood cell + automatic POCT online detection product, which has a wide range of application scenarios, can solve the inspection of routine items of outpatient population, and can better meet the timely inspection of five items of emergency heart and lung and the time requirements of emergency. The rapid promotion and installation of new products will further drive the large-scale growth of reagent business. At the same time, in 2021, the company also made good achievements in adding reagents, adding 30 Chinese product registration certificates / filing certificates, including 11 new product registration certificates in POCT field, 15 new product registration certificates in chemiluminescence field, 3 new product filing certificates in molecular diagnosis field and 1 new product registration certificate in quality control field.
Actively promote the strategic layout of animal diagnosis business. On December 2, 2021, the company established Jiangsu Jidan Animal Medical Technology Co., Ltd., whose business scope includes animal diagnosis and treatment, veterinary drug production, veterinary drug management, inspection and testing services, and officially entered the animal diagnosis industry. At present, the company’s animal diagnosis business includes five technical platforms: blood analysis, dry biochemistry, colloidal gold, immunofluorescence and molecular diagnosis. Relying on the existing R & D and production system and based on the current situation and demand of pet medical market, the company will continue to promote the rapid and healthy development of pet diagnosis in China.
It is proposed to subscribe for no less than 30% shares of superstar medical and strengthen the construction of its own channels. In April this year, the company announced that it plans to subscribe for the newly issued shares of superstar medical by paying cash. After the subscription is completed, the company will hold no less than 30% of the total shares of superstar medical after the issuance of new shares and become its controlling shareholder. Superstar medical is one of the largest distributors and service providers of in vitro diagnostic products in China. It has been deeply engaged in the Chinese market for many years. Roche diagnostic medical is one of the largest distributors of in vitro diagnostic products in China. It has established a huge sales network in China, a wide range of hospitals, a perfect distribution platform of medical institutions at all levels and an excellent operation and management team. If the company completes this subscription, it can form synergy and complementarity with the existing distribution and marketing platform of superstar medical, which will effectively enrich the resources of the company’s medical institutions, strengthen the penetration of high-grade hospitals, further strengthen the construction of the company’s own channels, promote the expansion of markets outside China, ensure the sales of self-produced products, lay a good foundation for the company’s further development in the field of IVD, extend the strategic layout and better promote the company’s future development.
The performance in the first quarter of 2022 exceeded expectations. In the first quarter of 2022, the company achieved a revenue of 571 million yuan, a year-on-year increase of 106.80%; The net profit attributable to the parent company was 219 million yuan, a year-on-year increase of 249.06%; The net profit deducted from non parent company was 220 million yuan, with a year-on-year increase of 245.95%, mainly due to the increase of overseas business and the significant increase of sales scale (mainly covid-19 detection reagent).
Investment suggestions:
We expect that the net profit attributable to the parent company from 2022 to 2024 will be RMB 619 / 528 / 575 million respectively, and the EPS will be RMB 1.70/1.45/1.58 respectively. The current share price corresponds to 10 / 12 / 11 times of PE. Considering that the company, as a leading POCT enterprise in China, has actively arranged other technical fields such as biological immunity and blood cells, and the layout of large-scale inspection has initially taken shape, the performance returns to the rising channel in 2021, the installation of instruments is progressing smoothly, further driving the large-scale sales of reagents, and the business expansion outside China is smooth, we maintain its “overweight” investment rating.
Risk tips:
Product demand is less than expected, product R & D is less than expected, national policies such as medical reform are uncertain, and order execution is less than expected.
