Event: the company released the mid-2022 report, with first-half income of 130 million yuan (+ 3.3%), net profit of 10.57 million yuan (- 55.4%), net profit of 7.68 million yuan (- 60.4%) and net operating cash flow of 16.06 million yuan (- 44.3%).
The performance is in line with expectations, and the increase in cost investment leads to short-term pressure on profits. 1) on a quarter-by-quarter basis, the income of 2022Q1/Q2 in a single quarter is RMB 0.5 million (+ 10.9%). The slowdown in income growth in the second quarter is mainly due to the impact of the epidemic. 2) in terms of profitability, 2022H1 gross profit margin is 53.3% (+ 6.9pp), mainly due to effective cost control of some orders, 44.1% (+ 14.5pp), mainly due to the significant increase in management expenses and R & D expenses, of which the management expense rate is 28% (+ 12pp), mainly due to the increase in employee salary, share payment amount and patent fee, and the R & D expense rate is 14% (+ 4pp). The increase in the above-mentioned costs led to pressure on profits in the first half of the year.
There is a high growth of wired machines, among which the contribution of hemodialysis products is mainly increased. From the perspective of business, the income of 22H1 safe infusion single machine is 20.69 million yuan (- 72.4%), and that of safe infusion line machine is 61.83 million yuan (+ 54.4%). The decline of safe infusion single machine is mainly due to the high base of equipment demand caused by COVID-19 vaccine syringe in the same period in 2021. The single machine income of 22H1 hemodialysis is 3.69 million yuan (+ 156.1%), and that of hemodialysis connection machine is 40.21 million yuan (+ 2481.6%), mainly due to the recovery of high growth under the low base of 2021. The company has become an important supplier of upstream intelligent equipment for domestic safety infusion and blood purification consumables, with a total market space of about 3 billion yuan. the company is expected to continue to grow with its cost-effective and technological advantages as well as the recovery of the impact of the epidemic.
R & D layout of potential business, pre-filling and insulin pen smart equipment is expected to provide new growth points. The barrier of medical consumable intelligent equipment industry is relatively high, which is mainly reflected in "compound discipline technical background + non-standard products + rapid technology change". The company attaches great importance to research and development, 22H1 annual R & D investment of 18.62 million yuan (+ 44.1%), accounting for 14% of receivables, the current reserve of medicine and equipment combination (pre-filling and insulin pen), orthopaedics, IVD and other consumable intelligent equipment in the research pipeline. In strategic cooperation with the Vega Group, the company held a 51% stake in Vega Automation in April 2022, and is expected to be deeply bound to become a supplier of consumables and smart equipment.
Profit forecast and investment advice. It is estimated that the net profit from 2022 to 2024 will be 0.8,1 and 130 million yuan respectively. The company is the leader of domestic medical consumables. The existing business is growing steadily, the incremental business is about to be expanded, and the "buy" rating is maintained.
Risk tips: the order is not as expected, the volatility risk of the investment cycle of the equipment industry.