On January 19, Andon Health Co.Ltd(002432) released the performance forecast for 2021. It is expected to achieve a net profit of 900-1.2 billion yuan in 2021, a year-on-year increase of 271.40% – 395.19%; Deduct non net profit of 850 million-1.15 billion yuan, a significant increase of 243.46% – 365.68%. And the increase was due to the continued impact of the COVID-19 epidemic in 2021. The sales of New Coronavirus’s (SARS-CoV-2) antigen self testing OTC kit in the US market increased significantly.
(source: Announcement)
On January 20, Andon Health Co.Ltd(002432) opened again and closed at 77.66 yuan / share, an increase of 10.00%.
release performance forecast and pull the share price back to a high
On January 18, the “demon king” Andon Health Co.Ltd(002432) fell by the limit. In just over two months, the highest increase of Andon Health Co.Ltd(002432) was more than 14 times, and the whole covid-19 detection concept sector collapsed at the same time. As of the closing, the covid-19 detection concept index fell by 7.26%, ranking the first in the decline. On the 19th, Andon Health Co.Ltd(002432) opened and fell immediately. As of the close, it fell by 5.27%.
After the stock price experienced a decline and correction, I thought that the “demon king” ushered in the end of the capital feast. Unexpectedly, Andon Health Co.Ltd(002432) chose to publish the performance forecast for 2021 at this time. Some investors joked that ” Andon Health Co.Ltd(002432) timing is really accurate.” Sure enough, on January 20 Andon Health Co.Ltd(002432) , the stock price rose by the limit, and the stock price returned to the price before the limit.
From the perspective of performance forecast, the data show that in the first three quarters of 2021, Andon Health Co.Ltd(002432) net profit achieved 50.1279 million yuan, a year-on-year decrease of nearly 90%, and the net profit after deduction was 24.775 million yuan. In the performance forecast, the annual net profit is expected to be as low as 900 million yuan, which means that the single quarter profit of Andon Health Co.Ltd(002432) in the fourth quarter is at least more than 800 million yuan. By lengthening the timeline, it can be found that the profit of Andon Health Co.Ltd(002432) in the fourth quarter has exceeded the total profit of the company in the past ten years.
Needless to say, the reason for the performance growth is that Andon Health Co.Ltd(002432) also mentioned that the company’s operating performance in 2021 mainly depends on covid-19 testing reagent. There are major uncertainties whether the future performance can continue to maintain rapid growth, which mainly depends on the progress of covid-19 epidemic prevention and control in the United States, the selection of covid-19 testing products in the United States The company’s product market competitiveness and channel sales ability, as well as the future development of conventional business, please pay attention to the investment risk.
Previously, Andon Health Co.Ltd(002432) announced on the evening of November 7, 2021 that its U.S. subsidiary’s covid-19 antigen home self-test OTC Kit (colloidal gold immunochromatography) has been authorized by the FDA for emergency use and can be sold in the United States and countries / regions recognized by the U.S. EUA during the U.S. public health emergency. As of January 20, 2022, Andon Health Co.Ltd(002432) the share price has increased by 29 limits in nearly 50 trading days, and the market value has increased to 37.168 billion yuan.
can the US market alone “rest easy”?
It is reported that the overseas market of Andon Health Co.Ltd(002432) is basically concentrated in the United States, and the demand for kits completely depends on the epidemic development in the United States. Although in the short term, affected by the Omicron epidemic, the demand for testing in the United States has expanded sharply and become the propellant for the company’s performance, with the continuous variation of covid-19 virus and the risks of relevant policies and logistics, can the performance of kit Andon Health Co.Ltd(002432) in the United States market be “worry free”?
Andon Health Co.Ltd(002432) also admitted in the announcement that there may be a risk that the contract can not be performed on schedule or in full due to the impact of local epidemic changes, policy changes, changes in the company’s supply chain capacity, logistics and transportation risks, as well as unpredictable or force majeure and other factors during the execution of orders and contracts signed with American companies. In addition, it should be noted that the U.S. government has the right to terminate the contract at any time due to its own factors.
In addition, Andon Health Co.Ltd(002432) has not opened the market in China. On January 9, the company submitted a plan to Tianjin epidemic prevention and control headquarters, suggesting that ihealth kit be put into use in Tianjin epidemic prevention and control through the emergency approval of Tianjin drug administration. Shenzhen Stock Exchange issued a letter of concern for this, asking Andon Health Co.Ltd(002432) to explain whether the proposed scheme is in line with China’s epidemic characteristics and prevention and control strategies.
In the reply, Andon Health Co.Ltd(002432) said that asymptomatic families in the sealed control area and control area can use the kit for self-test, cold people in the prevention area and other areas and people with overlapping time and space can also use the kit for self-test, and the relevant results can be reported through the photo app to supplement the data gap of epidemic prevention.
However, what is the accuracy of the covid-19 virus test kit? Therefore, some investors analyzed that it is not convenient to use it in China’s prevention and control in combination with China’s epidemic characteristics and prevention and control strategies. And because covid-19 self-test products are affected by operation methods, technical level and other factors, they can not be 100% accurate. Once there is a false positive, it is easy to cause panic. At present, China has not approved any covid-19 self-test products to enter the epidemic prevention and control.
At the same time, looking around, Andon Health Co.Ltd(002432) competitors are also “eyeing”. As of January 14, 12 manufacturers of home self-test kits have been approved by the U.S. FDA, including 3 with Chinese company background. China’s Aikang biology has been certified by the FDA as early as October 2021, and plans to expand its monthly production capacity from 200 million to 400 million, which is twice the current production capacity of Andon Health Co.Ltd(002432) .
how to find new growth points of performance?
Public information shows that the main business of Andon Health Co.Ltd(002432) is mainly divided into three fields: internet medical, intelligent IOT and consumer products, and household medical devices. The main products include blood pressure, blood glucose, wireless noise reduction headphones, smart watches, body fat scales, ear thermometers and sweeping Siasun Robot&Automation Co.Ltd(300024) and other fields. They are mainly products for families and individuals.
From the perspective of its traditional business, although it has been deeply cultivated in the electronic medical industry for 26 years, it has formed its own brand and reputation. However, objectively speaking, the technical barriers of household medical products are not high, and there are many homogeneous products, so it is difficult to form consumption stickiness.
At present, among the main medical devices in China, sphygmomanometers account for nearly 29%, while blood glucose meters account for 7.6%, and the market scale is not small. However, overseas brands such as Omron, Johnson & Johnson and Roche have obvious advantages, followed by Chinese brands such as sannuo and Yuyue, occupying the second echelon; In the market with many brands, Andon Health Co.Ltd(002432) did not get much share.
As a new business developed by the company after the outbreak of the epidemic, covid-19 antigen home self-test kit completely pulled Andon Health Co.Ltd(002432) out of the quagmire of “making ends meet”. The performance soared, and the stock price directly occupied the position of “demon king”.
Although Andon Health Co.Ltd(002432) has received an investment of US $25 million from Xiaomi group, and its products can be sold on the Xiaomi platform, and even received the support of apple, the company’s previous performance was flat, its pre epidemic revenue never exceeded 1 billion yuan, and its net profit was mainly kept positive by extraordinary profits and losses.
Moreover, judging from the performance in the third quarter of 2021, its performance almost depends on the epidemic situation. According to the data, its revenue in the third quarter of 2021 was 221 million, a year-on-year decrease of 60.93%; The net profit loss was 4.649 million, a decrease of 104.41% over the same period of the previous year. For the decline in revenue, Andon Health Co.Ltd(002432) replied that it was mainly due to the decrease in sales of anti epidemic materials at home and abroad.
In terms of its R & D expenses, the data show that from 2018 to 2020, its R & D expenses were 68.8638 million yuan, 80.0345 million yuan and 76.5446 million yuan respectively. In the third quarter of this year, its R & D expenses increased to 94.5266 million yuan. Although R & D investment has increased, the final products are few.
In addition, there are not a few pharmaceutical companies that have made a fortune through the epidemic, but if R & D capability is the core, if it can not follow, the space for performance growth may need to be reconsidered. However, as far as the current situation is concerned, Andon Health Co.Ltd(002432) other businesses do not seem to matter. After all, the focus now is all on the kit.
