Event: the company announced its annual report for 2021 and quarterly report for 2022, with operating income of 389 million yuan in 2021, an increase of 25.6% over the same period last year, and net profit of 95.59 million yuan, an increase of 33.4% over the same period last year. 2022Q1 achieved an operating income of 43.11 million yuan, an increase of 7.9% over the same period last year, and a net profit of-390000 yuan, down 106.7% from the same period last year. The company intends to use 61.76 million-123.52 million yuan to buy back shares for employee stock ownership plans or equity incentives.

Q4 has a steady growth, and the progress of tax rebate affects the performance of Q1. In 2021, the company realized operating income of 389 million yuan (YOY+25.6%), net profit of 9559 yuan (YOY+33.4%) and non-net profit of 889.1 billion yuan (YOY+42.2%). Among them, Q4 realized operating income of 182 million yuan, (YOY+18.3%), net profit of 55.93 million yuan (YOY+29.7%), and deduction of non-net profit of 52.05 million yuan (YOY+26.6%), which was in line with our previous expectations.

2022Q1 realized operating income of 43.11 million yuan (YOY+7.9%), net profit of-390000 yuan (YOY-106.7%) and deduction of non-net profit of 1.86 million yuan (YOY-132.7%), mainly due to the delay in tax rebate for software sales, resulting in a decrease of 4.24 million yuan in other income compared with the same period last year.

The high increase in contract liabilities reflects the high prosperity of the industry, and the pressure on cash flow has improved. The wave of new hospital infrastructure has brought great prosperity to the industry. as of 2022Q1, the company's contract debt was 104 million yuan, an increase of 69% over the same period last year, and sufficient orders supported performance growth. The company's cash flow was obviously under pressure in 2021, with a net cash inflow of 39.75 million yuan from operating activities for the whole year, a decrease of 77.49 million yuan compared with 2020, mainly due to the increase in the number of orders in hand and the increase in prepaid payments. the cash paid for goods and services for the whole year increased by 72% to 171 million yuan compared with the same period last year, and cash payment increased by 31pct to 109% compared with the same period last year. 2022Q1 has a net cash inflow of 6.24 million yuan from operating activities, an increase of 12.21 million yuan over the same period last year, and the cash flow pressure has improved.

The gross profit margin remained high and the expense rate decreased. The company's gross profit margin in 2021 and 2022Q1 is 59.6% and 52.8% respectively. Under the pressure of raw material prices, the gross profit margin remains high and has strong profit resilience. The decline in Q1 gross profit margin compared with the same period last year and month-on-month is mainly due to the company's off-season business in the first quarter, which is easily affected by a single project. From the expense point of view, the sales / management / R & D / financial expense rate of the company in 2021 is 13.8%, 10.2% and 10.2%, respectively.

7%, compared with the same period last year + 0.03pct/+0.17pct/-0.23pct/-1.81pct, the financial cost after listing was significantly optimized, and the overall expense rate decreased by 1.83pct compared with the same period last year. The sales / management / R & D / financial expense rate of 2022Q1 is 29. 5% respectively.

The fluctuation of the expense rate is obviously due to the low income base in the first quarter, which is 16.5%, 14.5%, 14.5%, 0.8%, + 6.54pct/-8.79pct/-3.89pct/+1.22pct, compared with the same period last year.

Continuous R & D investment and increasing core competitiveness. The company attaches great importance to R & D and innovation, through the advance layout and optimization of products, lead and respond to market demand, enhance the competitiveness of products and increase the sales amount of a single project. In 2019, the company began to build an integrated plan for the automatic and intelligent management of medical materials in the whole hospital. in 2021, the R & D expenditure increased by 23% to 39.61 million yuan compared with the same period last year, which was mainly invested in the R & D and production of the existing products. Such as the development of closed-loop transmission device for automatic dosing. The market response of the company's Kufa integrated products is enthusiastic, and orders have been obtained one after another in 2021, and the revenue contribution of only three related projects is as high as 25% of the total revenue. With the support of excellent R & D and products, the company continues to enrich its customers and further improve its market position. by the end of 2021, the company's products have covered 879 medical and health institutions in China, including 466 first-class hospitals.

Large repurchase motivates employees and fully demonstrates their confidence in development. The company announced on April 29 that it intends to use 61.76 million yuan to 123.52 million yuan to buy back shares within 12 months for employee stock ownership plans or equity incentives, with a repurchase price of no more than 40 yuan per share.

According to the upper limit of the repurchase price, the number of repurchases is about 154.4 to 3.088 million shares, accounting for 2% of the company's current total share capital. Based on the closing price of 24.52 yuan per share on April 29, the number of repurchases is about 251.9 to 5.038 million shares, accounting for 3.3% of the company's current total share capital. 6.5%. As of March 31, 2022, the company has total assets of 1.205 billion yuan and net assets of 811 million yuan. The lower / upper limit of the repurchase amount accounts for 5.1% of the company's total assets, 10.3% of the company's net assets and 7.6% of the company's net assets of 15.2%. The large repurchase fully demonstrates the company's confidence in development.

Profit forecast and investment advice: based on the impact of this year's epidemic on order execution, we have slightly adjusted our previous revenue forecast. It is estimated that the company's operating income from 2022 to 2023 will be 527 million and 690 million respectively (the previous value is 545 million and 726 million), an increase of 35.3% and 31.0% over the same period last year. Considering that the company will maintain strong profit resilience under the pressure of raw material prices in 2021, we raised our previous forecast for the company's gross profit margin and finally estimated that the company's return net profit from 2022 to 2023 will be 133 million and 177 million respectively (the previous value is 122 million and 162 million), an increase of 37.2% and 31.8% over the same period last year, corresponding to PE 14.4X and 11.0X respectively, maintaining the buying rating.

Risk tips: product and technological innovation R & D risk, industry competition risk, brain drain risk, risk of lagging behind or not updating public information in a timely manner.