Event: In 2022, Sanyou Medical achieved revenue of 649 million yuan, an increase of 9.4% over the previous year; it achieved net profit of 191 million yuan, an increase of 2.39% over the previous year; among them, spinal implant consumables achieved revenue of 538 million yuan, an increase of 4.14% over the previous year; traumatic implant consumables achieved revenue of 24 million yuan, a year-on-year decrease of 16.89%; active equipment and consumables achieved revenue of 74 million yuan, an increase of 58.66% over the previous year. Looking at the sales model, the one-two-ticket model achieved revenue of 317 million yuan, while the non-one-two-ticket model achieved revenue of 332 million yuan.
Deeply involved in the spine field, the trauma business surgery volume is growing rapidly: Sanyou's main products won the bid in Group A in spinal band volume procurement. The company will use the collection winning bid and innovative treatment research and development to further explore new admissions, increase the number of hospital surgeries, and comprehensively improve market coverage. The full range of trauma products won the bid at excellent prices in trauma belt procurement in Jiangsu Province. The average winning price far exceeded the joint purchase price of Henan and 12 other provinces in 2021, bringing new development space and competitive advantage to the company's inpatient sales of trauma products. In 2022, the number of surgeries performed by Sanyou Medical's trauma products increased by more than 40%.
Admissions of ultrasonic bone scanners have accelerated, and important progress has been made in sports medicine: the holding subsidiary Mizuki Tianpeng and Medtronic reached a cooperation agreement and signed an “Exclusive Distribution Agreement”. Mizuki Tianpeng authorized Medtronic to exclusively distribute ultrasonic bone scaffolding equipment and its supporting blades and other consumables in mainland China and is responsible for the promotion, marketing, sales and distribution of authorized products. By the end of 2022, more than 400 ultrasonic bone surgeries had been admitted to hospital in China, and nine provinces and cities across the country had completed price entry; two products independently developed by Sanyou, the titanium alloy wire anchor and the titanium plate with a titanium plate, were registered and approved by the State Drug Administration, filling the company's gap in the field of sports medicine.
Investment advice: We expect the company to achieve operating income of 730/99/1,188 million yuan in 2023-2025, and net profit of 191/2.50/308 million yuan. The corresponding PE was 32.61/24.92/20.23 times, respectively, giving an “increase in holdings” rating.
Risk warning: Single product structure and market development risks for traumatic products; spine collection has led to a sharp decline in ex-factory prices; the epidemic has repeatedly affected the development of elective surgeries.