\u3000\u3 Shengda Resources Co.Ltd(000603) 882 Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) )
Event: on April 26, 2022, the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved a total operating revenue of 11.943 billion yuan, a year-on-year increase of 44.88%; The net profit attributable to the parent company was 2.22 billion yuan, a year-on-year increase of 50.21%; The net profit deducted from non parent company was RMB 2.189 billion, with a year-on-year increase of 50.18%. In 2022q1, the company realized an operating revenue of 4.251 billion yuan, a year-on-year increase of 58.70%; The net profit attributable to the parent company was 850 million yuan, a year-on-year increase of 58.00%; The net profit deducted from non parent company was 837 million yuan, with a year-on-year increase of 57.84%.
The main business maintained high growth and the profitability was improved again. In 2021, the company’s main business medical diagnostic services achieved an operating revenue of 11.304 billion yuan, a year-on-year increase of 43.63%, of which the revenue from routine business (excluding covid-19 testing) was 6.622 billion yuan, a year-on-year increase of 27.28%. From 2021q1 to 2022q1, the operating revenue of the company was 2.679 billion yuan, 2.777 billion yuan, 3.162 billion yuan, 3.326 billion yuan and 4.251 billion yuan respectively, with a year-on-year growth rate of 128.10%, 20.52%, 34.39%, 37.64% and 58.70% respectively. The profitability of the company has been continuously improved. In 2021, the overall gross profit margin was 47.29%, with a year-on-year increase of 0.6pct, and the overall net profit margin was 19.29%, with a year-on-year increase of 0.7pct. Under the declining price trend of covid-19 nucleic acid detection project, the overall profit level of the company remains stable, indicating that the profit level of conventional business has increased significantly. We believe that this is mainly due to the strong scale effect and leading cost control ability of the company.
Continuously optimize the business structure and promote high-quality development. (1) In terms of test items, the company’s high-end special examination business (excluding covid-19) revenue accounted for 50.45% in 2021, up 1.68pct year-on-year. In terms of important diseases, the solid tumor diagnosis business revenue increased by 45.87% year-on-year, the nerve & clinical immune diagnosis business revenue increased by 38.21% year-on-year, the infectious diseases diagnosis business (excluding covid-19) revenue increased by 34.81% year-on-year, and the blood disease diagnosis business revenue increased by 31.90% year-on-year. (2) From the perspective of serving customers, in 2021, the revenue of the company’s tertiary hospital business (excluding covid-19) increased by 33.27% year-on-year, accounting for 35.9% of the company’s revenue, with a year-on-year increase of 2.3pct; Among them, the business income of Top100 tertiary hospitals increased by 55.11% year-on-year.
It covers a wide range of areas, and the grass-roots service capacity leads the market. The company’s business covers the area and goes deep into the grass-roots level. By the end of 2021, the company had built and operated 39 medical laboratories and cooperated to build 670 regional laboratories (more than 150 were newly expanded in 2021), covering more than 23000 medical institutions in more than 700 cities across the country, including the regions where more than 90% of the country’s population is located. The co construction service mode of regional testing centers such as urban medical association, county medical community and urban community has been deeply promoted, More than 400 laboratory pathology centers and more than 2000 radiation primary medical institutions have been jointly built. The company has the industry-leading logistics distribution capacity. By the end of 2021, it has more than 2000 logistics service outlets, reaching the grass-roots level of villages and towns. 95% of the samples have achieved the rapid logistics timeliness of delivery within 12h, 24h or 36h across provinces, and 80% of the reports have been issued 24h.
Investment suggestion: we estimate that the operating revenue of the company from 2022 to 2024 will be 15.010 billion yuan, 14.830 billion yuan and 16.052 billion yuan respectively, the net profit attributable to the parent company will be 2.697 billion yuan, 2.554 billion yuan and 2.687 billion yuan respectively, the corresponding EPS will be 5.79 yuan, 5.48 yuan and 5.77 yuan respectively, and the corresponding PE will be 14.4 times, 15.2 times and 14.5 times respectively, giving the investment rating of buy-a.
Risk warning: covid-19 detection demand uncertainty risk; The risk of intensified industry competition.
