Incidents:
On April 29, 2023, the company released the 2022 annual report and the first quarter 2023 report at the same time. In 2022, revenue of 1,434 million yuan was achieved, a year-on-year decrease of 28.09%, a year-on-year decrease of 902 million yuan, a year-on-year decrease of 86.30%, and net profit of non-Gimo was 91 million yuan, a year-on-year decrease of 85.24%. Q1 2023 achieved revenue of 391 million yuan, a decrease of 9.21% over the previous year, net profit of 58 million yuan, a decrease of 47.81% over the previous year, and net profit of non-return mothers was 47 million yuan, a decrease of 51.11% over the previous year.
Comment:
Traumatic products are facing challenges for the time being. Minimally invasive surgery and joint surgery grew rapidly, and the company's overall business revenue declined slightly in 2022. Among them, traumatic products achieved sales revenue of 542 million yuan, a decrease of 51.89% over the previous year; spinal products achieved sales revenue of 472 million yuan, a decrease of 16.50% over the previous year, mainly due to lower prices for medical consumables collection. Minimally invasive and joint products grew strongly. Among them, minimally invasive surgical products achieved sales revenue of 192 million yuan in 2022, an increase of 28.05% over the previous year; joint products achieved sales revenue of 59 million yuan, an increase of 173.25% over the previous year. In the future, the company will actively respond to industry changes brought about by collection, continue to consolidate its advantages in the field of orthopedic consumables, seize the opportunities brought by collection, and is expected to increase the market share of the company's products through winning bids and volume procurement.
Q1 Cost rate fluctuates, and R&D investment continues to increase
There was a slight fluctuation in the 2023 Q1 fee rate. Among them, the financial expense ratio was -1.91%, a year-on-year decrease of 0.74 pct, mainly due to an increase in deposit interest; the R&D expense ratio was 16.11%, an increase of 5.15 pct over the previous year, mainly due to increased remuneration of R&D personnel and increased R&D investment. The company is committed to research and development of high-value medical consumables. By the end of 2022, the company had applied for 300 batches of registration certificates, obtained 97 additional Class II and Class III registration certificates, and obtained 536 patents. Some products have passed US FDA and EU CE certification, further enhancing the company's overall competitiveness.
Optimize the industrial layout and actively broaden financing channels
The company is committed to innovating high-value medical consumables. On the basis of consolidating its leading edge in the field of orthopedic implant consumables, the company is actively expanding and perfecting new product lines, continuously promoting the construction of dental implant production lines, and cultivating new profit growth points. In addition to this, the company makes full use of the platforms of listed companies to actively expand financing channels. The company's non-public offering project was completed in 2022, and the total capital raised was 496 million yuan. It will be used for orthopedic implant consumables production line expansion projects, dental implant production line construction projects and additional working capital, which is conducive to expanding the production capacity of the company's high-value orthopedic implant consumables.
Profit forecast: We expect the company's revenue for 2023-2025 to be 18.63/24.15/3030 billion yuan respectively (pre-2023/2024 values were 32.37/4.204 billion yuan respectively). The reason for the reduction was that trauma collection had a certain impact on performance. Guimu's net profit was 3.60/502/658 million (pre-2023/2024 values were 1,286/1,653 billion yuan respectively), and downgraded to an “increase in holdings” rating.
Risk warning: Risk that R&D progress falls short of expectations, sales promotion falls short of expectations, and core products do not win bids in volume procurement.