The company focuses on the main business of orthopaedics, and the acceptance of therapeutic innovation is increasing. The domestic orthopaedic high-value consumables industry has long-term development potential and is expected to maintain a rapid growth momentum. At the same time, there are still many unresolved clinical needs, and innovation progress is promising. As a leading enterprise in the field of spine, the company attaches great importance to original innovation, R & D investment and R & D team continue to improve, forming a differentiated competitive advantage in complex spinal deformities, spinal degeneration, trauma and other subdivided fields, and establishing high brand awareness. Has a leading market position. The company's innovative main products Athena spinal internal fixation system, Zina spinal minimally invasive internal fixation system, Hails PEEK interbody fusion cage system, double head nail system, etc., fully meet the downstream clinical needs, and constantly upgrade and launch upgraded products, which are highly recognized by doctors and patients. According to the report issued by Southern Pharmaceutical economy, the company's spine products ranked fifth in the domestic market and second in domestic enterprises in 2019.
The collection of the spine landed gradually and paid attention to the follow-up changes. On July 11, 2022, the National Joint Procurement Office issued the "National Organization Orthopaedic Spine consumables centralized Belt Purchasing announcement (No. 1)". The official Orthopaedic Spinal consumables National Belt Purchasing started, and the centralized volume procurement showed a normal trend. Judging from the previous collection results, the average price reduction of coronary stent collection in 2020 is more than 90%. In 2021, the average price reduction of orthopedic artificial joint collection products is more than 80%. The price reduction is inevitable, but the price reduction may be more moderate. Up to now, collection in the field of trauma and joint has basically landed. From the business income of relevant leading enterprises, we can see that collection has brought about an increase in market penetration, and the concentration of domestic leading enterprises with strong comprehensive ability and complete product line has continued to improve, and the logic of long-term growth has not changed. At the same time, the price reduction pressure of collection and acquisition will also force enterprises to innovate and upgrade, and the enterprises with real innovation ability are expected to stand out. As a rare leading enterprise with therapeutic innovation in the spinal field, the company is expected to fully enjoy the acceleration of the industry brought about by volume premium, and its long-term development can be expected.
The new growth point has gradually entered the cash stage, and the company's development has ushered in new opportunities. By controlling the ultrasonic energy platform of Shuimu canopy layout, the company works closely with clinicians with the help of ultrasonic bone knife and ultrasonic hemostatic knife to solve the pain points of clinical surgery and constantly expand the boundary of clinical solutions. relying on the wholly-owned subsidiary Suzhou Tuoteng platform to carry out research and development of sports medicine and other products, related products have entered the product registration link of the State Drug Administration. Actively lay out international business, face the market and customers directly on the basis of patented innovative products, copy domestic experience to the whole world, and compete directly with overseas competitors. Signed a "distribution agreement" with Da Xiong Weiye to obtain the exclusive domestic agency of artificial bone Banggut / bongros products, further enriching the company's product line, improving the company's layout in the field of orthopaedic biomaterials, and providing new clinical solutions for downstream doctors and patients with long-term growth.
Considering the influence of the national orthopedic spine collection and epidemic situation, the revenue and gross profit margin are reduced, and the net profit of 22-24 years is estimated to be 2.07,2.27 and 283 million yuan respectively (the original forecast is 2.11,2.70 and 318 million yuan). According to the comparable company, 33 times PE for 22 years is given, and the target price is 30.03 yuan. Taking into account the company's main spine and new business long-term growth and relative valuation advantages, upgraded to the buy rating.
Risk hint
The collection policy of orthopaedics is higher than expected, the expansion of downstream channels is not as expected, the epidemic repeatedly affects the operation, the expansion of new business and internationalization is not as expected, and the change of hypothetical conditions affects the calculation results.