occurrences
On April 25, 2022, the company released its 2021 annual report. The company achieved operating income of 915 million yuan, an increase of 19.73% over the previous year; realized net profit of 103 million yuan, an increase of 70.24% over the previous year; net profit after deducting non-return net profit of 89 million yuan, an increase of 72.06% over the previous year. 2021Q4 In a single quarter, the company achieved operating income of 299 million yuan, a year-on-year decrease of 2.06%; realized net profit of 42 million yuan, an increase of 4.95% year-on-year; net profit of non-attributable income was 32 million yuan, a year-on-year decrease of 14.22%.
The intelligent manufacturing sector grew steadily, and business enabling performance in the chemical synthesis sector increased revenue of the intelligent manufacturing sector in 2021 by 693 million yuan, up 15.86% year on year; net profit of 47.5855 million yuan, up 56.25% year on year; gross margin was about 29.11%, and net profit margin was about 6.87%. In 2021, the intelligent manufacturing business segment signed 822 million yuan of new orders, an increase of 14.64% over the previous year. The cumulative number of unconfirmed revenue orders at the end of the period was 839 million yuan. Among them, the chemical synthesis intelligent manufacturing business is developing strongly, with more than 100 million yuan of new orders signed in 2021, an increase of more than 40% over 2020.
Rehabilitation equipment: The urban division is deeply involved in traditional business, and the rural division explores the primary care market. In 2021, rehabilitation medical equipment revenue was 223 million yuan, an increase of 33.58% over the previous year; net profit was 56.104 million yuan, an increase of 78.59% over the previous year, and a net profit margin of about 25.20%. The Urban Division is deeply involved in traditional advantageous business fields and consolidates the foundation for enterprise development. The rural division uses a new business model to develop the primary health care market, uses “overall solutions”, features in-depth services, and provides a full range of products and services covering operation and technical support before, during, and after project construction. 2021 was the first year of development of the rural division. During this period, a number of township health hospital projects were implemented and put into operation. By the end of the reporting period, the Village Division had a total of 39 sales staff.
The policy is supportive of rehabilitation, and the company actively lays out the blue ocean market for grass-roots rehabilitation equipment, and rehabilitation support policies have been introduced one after another in various countries, provinces and cities. In 2021, the “Notice on Issuing Opinions on Accelerating the Development of Rehabilitation and Medical Work” was issued at the national level, and 15 provinces including Beijing were identified as pilot provinces. Subsequently, various provinces such as Henan, Zhejiang, Guangdong, and Sichuan also issued rehabilitation support policies for each province. According to the China Health Statistics Yearbook, the number of township hospitals reached 35,762 in 2020. Currently, the rehabilitation equipment market for township health hospitals is still in its infancy. The company's rural division is developing at the grassroots level, and the development of rehabilitation business can be expected.
Profit forecasting and investment ratings
We expect the company's revenue for 2022-2024 to be 1,078/12.52/ 1,469 million yuan, a year-on-year increase of 17.78%/16.12%/17.37%. Regardless of the impact of equity incentives, we expect net profit to be 130/1.70/220 million yuan. We are optimistic about the development of the company's grassroots rehabilitation business and maintain the company's “buy” rating.
Risk warning: The risk of repeated COVID-19 pandemics, policy implementation falling short of expectations, risk of fluctuations in the performance of the intelligent pharmaceutical manufacturing business, risk that sales of rehabilitation devices fall short of expectations, risk of increased market competition.