\u3000\u3000 Shanghai Sanyou Medical Co.Ltd(688085) (688085)
Core view
The performance advance is in line with expectations. On January 20, the company issued the announcement of performance increase in 2021. It is estimated that the operating revenue in 2021 will reach 580-615 million yuan, a year-on-year increase of + 48.55% ~ 57.52%; The net profit attributable to the parent company is expected to be 176 ~ 190 million yuan, a year-on-year increase of + 48.45% ~ 60.26%. From the perspective of spin off, the operating revenue in the fourth quarter is expected to reach 161 ~ 196 million yuan, a year-on-year increase of + 32.55% ~ 61.32%; It is estimated that the net profit attributable to the parent company will be 63 ~ 77 million yuan, with a year-on-year increase of + 61.40% ~ 97.52%. The growth of net profit attributable to the parent company exceeds the operating revenue and the performance growth exceeds the expectation.
The company’s product competitiveness is prominent and its sales channels are sinking. The company is one of the few enterprises with the ability of original innovation based on clinical needs in the subdivided field of spinal implants in China. It continues to focus on therapeutic innovation, self-developed double headed nails and other products. The technology and product power are at the forefront, and the market acceptance is constantly improving. In 2021, the company won the bid at a relatively high price in the centralized purchase of trauma provincial alliance, which will help to expand the sales area of trauma products and promote the development of trauma business. At the same time, the company will take this opportunity to constantly adjust the co integration and cooperation of sales team and distribution channel, further promote the sinking of spine business sales channel, continue to expand sales share and contribute to long-term stable growth.
Maintain high investment in R & D and continuous progress in innovation, with promising prospects. The company expects that the annual R & D expenses in 2021 will be 51 ~ 58 million yuan, a year-on-year increase of + 50.36% – 71.00%, and the proportion in operating revenue is expected to further increase. The company focuses on therapy innovation and new business R & D investment, continues to increase R & D investment and R & D team construction, and continues to increase investment in spine therapy innovation, sports medicine, ultrasonic bone dynamic system and trauma. In September 2021, the company obtained the FDA approval of the innovative product double headed nail system (including the third-generation double headed nail) and clifkeysonepeek fusion system, officially opened the door to sales in the United States and other international markets, and the product innovation was recognized in the international market. Meanwhile, the acquired Shuimu canopy was consolidated in July 2021, and its layout of ultrasonic bone knife with cutting-edge technology is expected to achieve innovative treatment synergy with the company’s current products. The company has developed from orthopedic implantation to overall clinical scheme layout. In the long run, the core strength brought by innovation continues to increase, and the prospect is worth looking forward to.
Profit forecast and investment suggestions
The company is the leading enterprise in the field of orthopaedic implant consumables. Due to the epidemic control and the continuous sinking of the company’s spine business, the pre increased performance in 2021 exceeded the expected growth. We raised the company’s sales assumption for 21 years. At the same time, considering the pressure of centralized purchase and price reduction and the increase of sales and R & D investment, we lowered the gross profit assumption for 21-23 years and raised the expense assumption, It is estimated that the earnings per share from 2021 to 2023 will be RMB 0.88/1.02/1.31 respectively (formerly RMB 0.78/1.09/1.41). With reference to comparable companies, the company will give a 21-year 48 times PE valuation, the target price is RMB 42.24, and maintain the overweight rating.
Risk tips
Orthopedic product volume procurement risk, new product R & D failure, product sales less than expected, intensified industry competition and other risks
