The company announced its semi-annual report for 2021: the income during the reporting period was 91.234 million yuan, an increase of 119.13% over the same period last year; the net profit was 47.285 million yuan, an increase of 371.76% over the same period last year; and the net profit after deducting non-profit was 36.88 million yuan, an increase of 421.58% over the same period last year.
The performance was in line with expectations and returned to high growth after the domestic epidemic: 1) the strong growth of reported income and profit was mainly due to the rapid recovery of domestic market demand for bone repair materials under the effective control of the domestic epidemic. We expect the company to achieve rapid growth of skeletal gold, tooth shellfish and cranial Rui products based on the leading advantage in the field of mineralized collagen artificial bone repair materials and continuous marketing promotion. At the same time, it is expected that sales of BonGold in overseas markets will still be affected by repeated outbreaks overseas. 2) in a single quarter, 2021Q2 achieved revenue and net profit of + 101.2% and + 194.7% respectively compared with the same period last year, which is further verified by the high recovery growth in the post-epidemic era in China. 3) in terms of financial indicators, 2021H1 achieved gross profit margin, sales expense rate, management expense rate, R & D expense rate and financial expense rate respectively compared with the same period last year. We expect that the return to high income growth and the reduction in labor costs during the reporting period will also have some impact on the low base income caused by the epidemic in the same period last year. In addition, the company's cash flow performed well, and 2021H1 realized operating cash flow of 47.58 million yuan, a substantial increase compared with the same period last year.
New product research and development continues to advance, continue to enlarge the leading advantage: the company is in the industry leading in many fields, such as in vitro biomimetic mineralization technology, collagen extraction and purification technology, etc. Rich in the promotion of the research pipeline is expected to quickly bring new varieties and continue to magnify the company's technological leadership. During the reporting period, the mineralized collagen / polyester artificial bone repair material project and the collagen sponge project entered the clinical trial phase as planned (all cases were scheduled to be completed in the first half of 2022 and the end of 2021, respectively). The company has obtained 3 invention patents granted by the State intellectual property Office of China and formed and applied for 7 Chinese invention patents. The proportion of R & D staff and average salary continue to grow, giving impetus to the follow-up long-term development.
Bone repair materials have a broad prospect, and the leading permeability is expected to increase rapidly: the bone repair materials industry is developing rapidly, based on the fact that there is still a huge gap in the domestic bone defect treatment market and the bone repair materials are expected to continue to replace autogenous bone, there is a huge potential space for the market scale and clinical permeability of bone repair materials. The mineralized collagen artificial bone repair materials independently developed by the company have industry-leading advantages in bone conductivity, biocompatibility and biodegradability, and can achieve good substitution for autogenous bone, allogeneic bone and other artificial bone repair materials. At present, the domestic market share is still small, the foreign market starts quickly, and the leading market penetration is expected to increase rapidly.
Profit forecast and rating: we expect the company's net profit from 2021 to 2023 to be 120 million yuan, 165 million yuan and 222 million yuan, an increase of 35.4%, 37.1% and 34.7% over the same period last year, corresponding to PE of 68x, 50x and 37x. It is optimistic that the company, as the leader of artificial bone repair materials with global competitive advantage, has entered a period of rapid growth.
Maintain a "buy" rating.
Risk hint: market competition aggravates risk, product price reduction risk, new product research and development risk.