\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 763 Topchoice Medical Co.Inc(600763) )
Key investment points
Event: the company’s operating revenue in 2021 was 2.78 billion yuan, with a year-on-year increase of about 33.2%, and the net profit attributable to the parent was 700 million yuan, with a year-on-year increase of about 42.7%. The net profit attributable to the parent after deduction was 670 million yuan, with a year-on-year increase of about 41.7%; In 2022, Q1’s operating income was 660 million yuan, with a year-on-year increase of 3.7%, and the net profit attributable to the parent was 170 million yuan, with a year-on-year increase of 1.3%. The net profit attributable to the parent after deduction was 160 million yuan, with a year-on-year increase of about 1%.
The income growth in 2021 is in line with the expectation. Since 21q4, the epidemic has affected the decrease of income growth. Affected by the epidemic in Q4 in 2021, the growth rate of revenue and profit decreased significantly. In view of the good performance of q1-q3 revenue end and profit end in 2021, the company’s revenue end and profit end increased by 33.2% and 42.7% year-on-year in 2021, basically in line with expectations. In the first quarter of 2022, the epidemic broke out in many places across the country, and the epidemic broke out occasionally in Zhejiang Province, the headquarters of the company. The daily outpatient volume of the company decreased due to the impact of the epidemic; In addition, the growth rate of doctors’ visit and referral income in Zhejiang Province is lower than that expected in 2022.
The profit margin increased steadily, and the expenses were properly controlled during the period. In 2021, the company’s gross profit margin was about 46.1%, with a year-on-year increase of 0.9pp; The net interest rate was about 28.3%, with a year-on-year increase of 2.2pp. In 2022q1, the gross profit margin is about 46.8%, the net profit margin is about 29.1%, and the profit margin remains high and steadily rising. In terms of period expenses, in 2021, the sales expense rate was about 0.89%, with a year-on-year increase of 0.03pp, and the management expense rate was about 9.3%, with a year-on-year decrease of 1.7pp; In 2022q1, the sales expense rate was about 0.92%, a year-on-year decrease of 0.03pp, and the management expense rate was about 9.9%, a year-on-year increase of 0.2pp. With the continuous expansion of the company’s team, the sales expense rate and management expense rate can remain stable, which fully reflects the company’s expense management ability during the period and provides guarantee for the steady improvement of the company’s net profit margin.
The established strategy has been gradually implemented, and it is expected to resume high performance growth after controlling the epidemic. Since the launch of the “Dandelion plan”, the company has achieved certain results. The proportion of the revenue of the General Hospital of the company has continued to decrease from 64.1% in 2018 to 52.9% in 2021. Shangyu, Zhuji and other branches of the company performed well. As a county-level branch, Zhuji branch’s revenue exceeded 100 million yuan in 2021, which further proved the feasibility of the plan. In terms of business, in 2021, the company separated the repair business from the planting business, and at the same time, the income of planting, orthodontics and other lines increased by more than 30%, which once again shows the strength of the balanced development of all business lines of the company and the increasing demand for oral medical services of residents. Although the number of outpatients and income in 2022q1 are lower than expected due to the epidemic, the demand stock is still. When the epidemic is controlled, there will be a demand release period, and the performance is expected to resume high growth.
Profit forecast and investment suggestions. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 9.1/11.5/1.49 billion respectively, EPS will be RMB 2.83/3.60/4.65 respectively, and the corresponding PE will be 44x / 34x / 27x. Considering that the company is the leader of oral medical services, the demand for oral medical services will be released after the epidemic is controlled, and the performance is expected to resume high growth and maintain the “buy” rating.
Risk warning: epidemic spread risk; Policy risk; The risk that the improvement of the company’s operating efficiency does not meet the expectations.
