\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 88 Winner Medical Co.Ltd(300888) )
Event description
The company announced that it plans to use its own capital of 652 million yuan to acquire 65.55% equity of Hunan Ping An medical equipment Technology Co., Ltd. and use its own capital of 100 million yuan to increase the capital of the underlying assets. After the completion of the above transaction, the company invested 752 million yuan to hold 68.70% equity of Hunan Ping An medical equipment.
Event comments
The merger and acquisition was accelerated, and the acquisition of PE was 11.70 times. The valuation was reasonable: the company acquired 68.7% equity of Hunan Ping An medical equipment Technology Co., Ltd. for 752 million yuan, and the overall valuation of the underlying assets was 994.5 million yuan, corresponding to its net profit of 85.03 million yuan in 2021, and the acquisition of PE was 11.70 times. The acquisition price was reasonable. At the same time, the company signed the letter of intent for investment with the people’s Government of Li County, Hunan Province. It plans to promote Hunan Ping’an medical equipment as the main investor to sign an investment agreement with the people’s Government of Li County, Hunan Province after the delivery for the construction of medical device production lines, intelligent warehouses, R & D buildings and other supporting facilities. The total investment of the project is 700 million yuan. After the completion of this transaction, among the five directors of Hunan Ping’an medical equipment, three directors, including the chairman, are nominated by Winner Medical Co.Ltd(300888) .
Cut into the field of injection and puncture and expand the product line of medical consumables: Hunan Ping’an medical equipment is an enterprise mainly engaged in R & D, production and sales of injection and puncture products. Its main products include syringes, infusion sets, blood collection needles, blood collection vessels, indwelling needles, etc. it is a well-known trademark and national high-tech enterprise in China. In 2020, it won the “second batch of specialized and special new small giant enterprises”. It has 39 registration certificates of various medical devices, including 16 in category III, 19 in Category II and 4 in Category I, and 24 patent certificates. Its business covers China and overseas markets, among which it has a leading market share in the hospital market of Hunan Province. In 2021, the revenue was 360 million yuan, the net profit was 85.03 million yuan, and the net profit margin reached 23.6%.
The acquired assets have synergy with the original business in many aspects: product side: according to the research and analysis of IBM and medical equipment exchange, China’s low-value medical consumables market will reach 221.3 billion yuan in 2025, of which puncture and injection products account for about 28%, belonging to the largest category of low-value medical consumables in China. This acquisition will expand the product line of Winner Medical Co.Ltd(300888) medical consumables business and form synergy with the company’s original medical sanitary materials and dressing products, The syringes, infusion sets, indwelling needles, puncture bags and other products of Hunan Ping An medical equipment are matched with Winner Medical Co.Ltd(300888) operating room consumables and wound care products to form various combination bags, and finally provide hospital users with one-stop customized solutions to solve patients’ pain points. Channel side collaboration: the target asset has a leading hospital market share in Hunan Province. The Winner Medical Co.Ltd(300888) acquisition will help the business of the target asset expand to the national market ( Winner Medical Co.Ltd(300888) serves more than 4000 hospitals), and the hospital channels can complement each other. Production and manufacturing end: R & D capability and manufacturing are the advantages of Winner Medical Co.Ltd(300888) and will help Ping An medical equipment to continuously develop innovative products and solutions and build a leading intelligent manufacturing factory in the future.
Investment advice
Winner Medical Co.Ltd(300888) medical consumables Co., Ltd. & two wheel drive of healthy living consumer goods business, the high base brought by the explosive growth in the demand for epidemic prevention products in 20 years has been basically digested in 21 years. The healthy consumer goods business maintained steady growth, and offline channels were gradually promoted. In the past 22 years, the merger and acquisition of medical consumables business has accelerated. After the acquisition of 55% equity of Longtai medical in April (the leader of China’s high-end dressing), this merger and acquisition has further expanded the puncture and injection products, and the medical consumables products have been continuously improved.
It is estimated that the company’s EPS from 2022 to 2024 will be 3.38 4.05 4.63 respectively, corresponding to the company’s closing price of 61.37 yuan on May 19, and the PE from 2022 to 2024 will be 18 15 13 respectively, giving a “buy-b” rating.
Risk tips
Raw material costs rose, terminal sales fell short of expectations, and M & A integration fell short of expectations.
