\u3000\u3000 Shanghai Sanyou Medical Co.Ltd(688085) (688085)
Event: the company released the performance forecast for 2021. It is expected to achieve an operating revenue of 580-615 million yuan in 2021, with a year-on-year increase of 48.55% – 57.52%; The net profit attributable to the parent company was 176-190 million yuan, with a year-on-year increase of 48.45% – 60.26%; Deduct non net profit of 124-135 million yuan, with a year-on-year increase of 31.05% – 42.67%.
The sales of spine products increased steadily, and the non deduction performance maintained rapid growth. According to the median value of the performance forecast, the growth rates of the company’s operating revenue, net profit attributable to the parent company and net profit deducted in 2021 were 53%, 54% and 37% respectively, of which the growth rates of operating revenue, net profit attributable to the parent company and net profit deducted in 2021q4 were 47%, 79% and 66% respectively. Among them, the median amount of impact of non recurring profits and losses on net profit is 55 million yuan, which is mainly due to the income from changes in the fair value of financial assets held by the company, government subsidies and financial management income. After deducting non recurring profits and losses, the company’s performance still maintains rapid growth. We expect it to be mainly due to three reasons: first, after the epidemic situation is effectively controlled, orthopedic surgery in the hospital is carried out in an orderly manner; Second, the company actively promotes the promotion of innovative products, continuously promotes the further sinking of channels, and realizes the steady improvement of product sales; Third, Shuimu canopy will have a positive impact on the consolidation in July 2021. The company continues to increase its R & D investment. It is estimated that the R & D expenditure will be 51-58 million yuan in 2021, with a year-on-year increase of 50.36% – 71.00%, mainly because the company continues to focus on therapy innovation and new business R & D investment, and continuously increases its investment in spine therapy innovation, sports medicine, ultrasonic bone power system and trauma.
The ultrasonic hemostatic knife has been approved for listing in China, which is expected to break the import monopoly and further enrich the company’s product categories. The company announced on November 25 that the ultrasonic hemostatic knife independently developed by Shuimu Tianpeng has obtained the medical device registration certificate. It is used to cut and stop bleeding of soft tissue during surgery and can be used to close blood vessels with a diameter of no more than 3mm. The technical indicators of the ultrasonic bone knife series products of Shuimu Tianpeng are better than those of similar international and Chinese brands. Its ultrasonic hemostatic knife has previously obtained the EU registration certificate. The approval for listing in China will further promote the sales of relevant products in the Chinese market and have a positive impact on the future development of the company.
The internationalization strategy has been steadily promoted. The company’s innovative products, double headed nail system (including the third generation of double headed nails) and clifkeysonepeek fusion system, were approved by the FDA in September 2021. The products can be widely used for lumbar degeneration, spondylolisthesis, spinal deformity and adult scoliosis. The design and treatment have reached the international leading level, which is helpful for the company to explore the American market It is of great significance to further promote the implementation of internationalization strategy.
Profit forecast and investment suggestions: according to the performance forecast and considering the consolidation of Shuimu canopy, we adjust the profit forecast. It is estimated that the company’s revenue from 2021 to 2023 will be 598, 797 and 1062 million yuan (579, 753 and 985 million yuan before adjustment), with a year-on-year increase of 53.03%, 33.35% and 33.24%, and the net profit attributable to the parent company will be 183, 258 and 345 million yuan (158, 221 and 311 million yuan before adjustment), Year on year growth of 54.36%, 41.13% and 33.57%, corresponding to EPS of 0.89, 1.26 and 1.68. At present, the company’s share price corresponds to 34 / 24 / 18 times PE in 2021 / 2022 / 2023. Considering the good growth of spinal implant consumables track, the company’s spinal product R & D strength is leading and its core competitiveness is outstanding. It is expected to benefit from the process of import substitution and market concentration improvement at the same time. At the same time, the continuous expansion of service boundary brings about the continuous enhancement of comprehensive strength and maintains the “buy” rating.
Risk warning events: policy change risk, product quality and potential liability risk, risk that the long-term R & D and market development of trauma products do not meet the expectations, risk that the public information lags behind or is not updated in time, and the impact of volume procurement on revenue exceeds the expectations.
