The readings of this report are as follows:
The company reported results in 2021 in line with expectations, trauma income growth slowed down, focus on volume premium under volume purchases, and maintain the overweight rating.
Main points of investment:
The performance is in line with expectations and the overweight rating is maintained. The company's 2021H1 income is 847 million yuan (+ 25.83%), deducting non-return net profit of 283 million yuan (+ 23.17%). Q2 revenue increased by 6.57%, and home net profit increased by 6.44%. The growth rate has slowed down, which is expected to be related to the high 2020Q2 base and the reduction of dealers taking goods before volume purchase, and the performance is basically in line with expectations. Maintain the 2021-2023 forecast EPS 1.82RMB / 2.87RMB, maintain the target price 81.89RMB, corresponding to 2022PE 36X, maintain the overweight rating.
The growth rate of revenue from the trauma business has slowed, while other businesses have maintained rapid growth. In terms of products, the trauma income was 527 million yuan, an increase of 16.00% over the same period last year, and there was a certain pressure under the volume procurement policy; spinal income was 183 million yuan, up 40.22% over the same period last year; minimally invasive surgery income was 61 million yuan, up 62.69% over the same period last year; the income of neurosurgery, surgical instruments, implants and other products was still small, and the income increased by 28.61%, 45.90% and 66.17% respectively over the same period last year, maintaining rapid growth.
The expense rate and gross profit margin remained stable as a whole. The 2021H1 sales expense rate was 32.68%, an increase of 0.10pct over the same period last year; the management expense rate was 4.49%, an increase of 0.22pct over the same period last year; and the R & D expense rate was 7.87%, a decrease of 0.37pct over the same period last year. The gross profit margin of 2021H1 is 85.70%, which remains stable as a whole.
Pay attention to the quantity premium under the volume procurement policy. In July, in the purchase of orthopedic trauma belt in Henan and other 12 provinces (autonomous regions and cities), the company won the bid in all the three procurement packages of ordinary bone plate system, locking compression plate system and intramedullary nail system, and the winning price dropped greatly as a whole. We still need to pay attention to the follow-up price. The company acquires 51% stake in Beijing Anders Kopp, an enterprise of intervertebral poroscope equipment and matching equipment consumables, enriching the company's minimally invasive spinal product line. In the recent national joint belt procurement group, the company's hip and knee products are in group B, and the final results need to be landed on September 14.
Risk hint: repeated risk of epidemic situation, with volume purchase price reduction more than expected risk.