\u3000\u3000 Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760)
Key investment points
Event: on January 19], the company issued the draft of the employee stock ownership plan. It plans to buy back 3048662 shares of RMB 1 billion previously for the employee stock ownership plan, accounting for about 0.2508% of the current total share capital of the company.
1) participants: no more than 2700 core employees and technical backbones of the company.
2) employee purchase price: 50 yuan / share, and the total capital of this employee stock ownership plan shall not exceed 152 million yuan.
3) performance assessment objective: the compound growth rate of net profit attributable to parent company from 2022 to 2024 shall not be less than 20%.
4) share based payment expenses: it is estimated that RMB 390 million, RMB 310 million, RMB 140 million and RMB 36 million respectively from 2022 to 2025.
The growth rate of endogenous performance exceeded 20%, demonstrating the company’s confidence in long-term high growth. The performance assessment objective of the employee stock ownership plan is the apparent net profit attributable to the parent. If the share based payment expenses to be amortized are excluded, the actual growth rates of endogenous net profit from 2022 to 2024 are 24%, 23% and 21% respectively, with a compound growth rate of more than 20%, demonstrating the company’s confidence in long-term high growth and dispelling the market’s concern about the decline of the company’s performance growth. This incentive involves a large number of employees, all of whom are core employees and technical backbone, which is expected to further stimulate the efficiency of the enterprise.
The short-term performance is determined, and the long-term “innovation + M & A + internationalization” helps the company become a global device giant. In the first three quarters of 2021, the production line of life information and support increased by double digits. The growth rate of IVD line is expected to be 25 ~ 30%, and the growth rate of imaging business is expected to exceed 30%. Considering the low base of Q4 and the continuous development of new medical infrastructure, it is highly certain that the growth rate of the whole year in 2021 will exceed 20%. In the long run, the company will continue to increase its global share by relying on “innovation + M & A + internationalization”, and is expected to sprint to the top 20 global devices in 5-10 years. At that time, we judge that the company’s revenue is about US $15 billion, which is expected to exceed the potential of trillion market value.
Profit forecast and investment suggestion: This shareholding plan shows the company’s confidence that the growth rate of endogenous performance in the next few years will exceed 20%. Considering the share based payment expenses, it is estimated that the revenue in 2021-2023 will be 25.55 billion yuan, 31.28 billion yuan and 38.24 billion yuan respectively, the net profit attributable to the parent company will be 8.26 billion yuan, 10.02 billion yuan and 12.19 billion yuan respectively, the corresponding PE valuation will be 49, 41 and 33 times respectively, and the corresponding valuation of endogenous performance in 2022 will be less than 40 times, Maintain the “buy” rating.
Risk tip: exchange rate fluctuation risk, policy cost control risk, and new product research and development are not as expected.
