\u3000\u3000 Zhejiang Gongdong Medical Technology Co.Ltd(605369) (605369)
Summary of this issue:
Event: the company issued a performance forecast for 2021, and the performance slightly exceeded expectations. The company predicts that the net profit attributable to the parent company in 2021 will be 315 million yuan, a year-on-year increase of 39%, and the net profit attributable to the parent company after deduction of non-profit will be 302 million yuan, a year-on-year increase of 40%. In the fourth quarter, the net profit attributable to the parent company in a single quarter was 63 million yuan, a year-on-year increase of – 6%, deducting 64 million yuan of non attributable net profit, which remained unchanged year-on-year.
Comments:
The growth of IVD customized consumables business and traditional medical business helped to exceed the target. Based on the rapid growth of revenue and profit in the first three quarters. The company’s Q4 orders were full in 2021 and continued to maintain high capacity utilization. Although Q4’s net profit attributable to the parent company decreased year-on-year due to the impact of some capacity due to the relocation of new factories, the company still exceeded the annual sales target. Among them, IVD customization business has made rapid progress and contributed to the main increment. China’s traditional medical business benefited from the improvement of the epidemic situation in 2021 and also contributed to some performance growth.
The capacity of traditional business is gradually increasing. As the leader of disposable medical consumables in China, the company has the advantages of product strength and customer recognition in the business of vacuum blood collection system, experimental detection consumables, body fluid collection consumables, medical care consumables and drug packaging materials. The company’s listed projects with raised capital will further expand its production capacity. With the implementation of the expansion projects, the capacity release of medical consumables business in 2022 will provide a driving force for the company’s sustainable growth.
The rapid development of new business, the company’s future growth can be expected. After years of deep cultivation, the company has formed the advantages of mold development and rapid response ability in IVD customization business, has global competitiveness, and has many potential customers in the world. At present, the business has entered the rapid volume period. At the same time, the company has arranged businesses such as scientific research consumables, drug packaging materials and animal consumables. The continuous volume of new businesses will continue to boost the performance growth of the company.
Profit forecast and investment rating: we estimate that the company’s operating revenue from 2021 to 2023 will be RMB 11.00/13.83/1.742 billion respectively, with a growth rate of 32.6% / 25.8% / 25.9%, the net profit attributable to the parent company will be RMB 315 / 399 / 508 million respectively, with a growth rate of 39.6% / 26.4% / 27.5%, and the corresponding PE will be 51 / 40 / 32x respectively.
Risk factors: the development of new customers is less than expected, and the risk of trade friction.
