occurrences

The company disclosed its 2022 annual report. The company achieved operating income of 3.119 billion yuan, an increase of 0.70% over the same period last year; the net profit of the mother was 312 million yuan, an increase of 6.97% over the same period last year.

At the same time, the company also published its report for the first quarter of 2023. The company achieved operating income of 689 million yuan in the first quarter of 2023, a decrease of 20% over the previous year, and achieved net profit of 85 million yuan to the mother, an increase of 20.08% over the same period of the previous year, and achieved net profit of 82 million yuan after deducting non-return to the mother, an increase of 31.22% over the same period last year.

Incident reviews

The company rationalized its product line in 2022, and subsequent new products will continue to be launched. The company's overall performance in 2022 was basically in line with expectations. 2022Q4 was affected by the domestic epidemic, and the revenue side reached 720 million yuan, down 18.44% from the previous year, net profit was 56 million yuan, down 28.98% from the previous year, and gross sales margin reached 32.91%.

Looking at the company's business structure, the company's specimen collection business achieved revenue of 488 million yuan (yoy +84%), the puncture care business achieved revenue of 1,943 million yuan, the puncture interventional business achieved revenue of 155 million yuan, and the medical and aesthetic sector contributed 64 million yuan in revenue. By subregion, the company's domestic business achieved revenue of 2,116 million yuan (YOY +3.47%) in 2022, and revenue from foreign business reached 996 million yuan (YOY -4.48%).

In 2020-2022, the company developed a diversified industrial investment layout, promoted the operation and expansion of the piercing industry, specimen collection industry, medical and aesthetic industry, active equipment industry, all categories of channel industry, and home health care industry, and implemented the strategic idea of “focusing on the main business of piercing and developing diversified industries”. The business pattern of the four industrial bases in Shanghai, Zhejiang, Guangdong and Guangxi was formed, and the effects of mutual collaboration and assistance between block operations were evident.

In terms of new products, the company has iteratively upgraded and developed new products launched one after another. In 2022, the company completed domestic registration with disposable injection pen needles, disposable biopsy needle series, and disposable anesthetic needle; completed standard filing and marketing of animal devices; and added active device products such as infusion pumps. Overseas registration of products such as slip-sleeve safety insulin syringes, slip-sleeve safety syringes, disposable sterile syringes with safety needles, and disposable safe insulin supporting pens and needles has been approved for overseas registration.

In terms of developing product lines, iterative products such as disposable pump syringes, disposable drainage bags, safe placement needles, safety injection needles, safe blood collection needles, safe insulin pen companion needles, sterilized caps, non-sterile blood collection tubes, improved dosing syringes, safe implantable needles, and oocyte collectors will also be registered and marketed in China one after another.

2023Q1 The company's non-net profit withheld to the parent increased more than expected

2023Q1's net profit after deducting non-return to the parent company reached 82 million yuan, an increase of 31.22% over the same period last year, and the net sales interest rate also reached 15.05%, which is the company's high level since the quarter of recent years. We believe that on the one hand, with the increase in gross margin due to changes in the company's revenue structure, 2023Q1's gross sales ratio reached 34.40%, up 2.20 pp and 1.49 pp respectively from 2022Q3 and 2022Q4 under the same statistical scale. On the other hand, it is related to the company's expense control.

Investment advice

Based on the company's latest announcement, we expect the company's revenue to reach 3.355 billion yuan, 3.853 billion yuan and 4.447 billion yuan respectively in 2023-2025, up about 7.6%, 14.8% and 15.4% respectively. Net profit attributable to the mother in 2023-2025 will reach 392 million yuan, 465 million yuan and 554 million yuan respectively, with year-on-year increases of about 25.6%, 18.8% and 19.0% respectively. The EPS for 2023-2025 was $0.89, $1.05, and $1.25, respectively, and the corresponding PE valuations were 17x, 14x, and 12x, respectively. In view of the continuous upgrading of the company's products, the overseas market is expanding smoothly, the domestic market is stable, and the “buy” rating is maintained.

Risk warning

industry policy risks;

Product development risks;

Risk of rising commodity prices.