Core ideas:
1. Events.
According to the report released by the company, the company achieved operating income of 108 million yuan in the first half of 2015,-3.73% year-on-year; net profit belonging to shareholders of listed companies was 27.02 million yuan,-2.65% year-on-year; and net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 26.45 million yuan,-4.04% year-on-year. The realization EPS is 0.09 yuan.
two。 Our analysis and judgment.
(1) the main business operation is relatively stable and the cost control is relatively good.
The company reported slightly better-than-expected results, but on the whole, the company's main business operation is relatively stable. According to the product line, the income of infant incubator, which accounts for 56.87% of the main business income, decreased by 6.27% compared with the same period last year, and the income of infant radiation heating station, which accounted for 19.96% of the main business income, decreased by 15.54% compared with the same period last year. Income from neonatal jaundice treatment equipment, which accounts for 10.04% of the main business income, increased by 31.13% compared with the same period last year. From a sub-regional point of view, the decline in export sales has mostly become the main factor affecting the overall income growth rate, with domestic product revenue of 81.38 million yuan, an increase of 7.94% over the same period last year, and export product revenue of 25.41 million yuan, down 28.44% from the same period last year.
The cost control is good. The sales expense rate decreased by 0.14% compared with the same period last year, the management expense rate increased by 1.45%, and the financial expense rate decreased by 0.54% year-on-year.
(2) the continued increase of major shareholders' holdings demonstrates strong confidence in the future of the company.
The company announced on the evening of July 9 that Mr. Chen Zaihong, the company's controlling shareholder, actual controller and chairman, planned to increase his holdings of the company's shares by not less than 50 million yuan within three months from July 10, 2015. subsequently, through the targeted asset management plan on July 31, August 4 and August 10, the company's shares were increased by 975500 shares at an average price of 25.54 yuan per share, with an increase of about 24.9171 million yuan. On August 4, the average price of 208300 shares was 23.25 yuan per share, and the amount of increase was about 4.8432 million yuan. On August 10, the average price of 178600 shares was 27.73 yuan per share, and the increase amount was about 4.9527 million yuan. As of August 10, 2015, the chairman, Mr. Chen Zaihong, has accumulated 1.3624 million shares of the company's shares through the targeted asset management plan, accounting for 0.47% of the company's total share capital, with an increase of about 34.7131 million yuan. According to the increase plan, it is expected that about 15 million more shares with a market capitalization will need to be increased in the next two months or so. We believe that the continuous increase in holdings by the company's controlling shareholders, actual controllers, and the chairman of the board of directors demonstrates their firm confidence in the company's future.
(3) the integrated layout of pregnancy and maternity may become a bright spot of the company in the future.
We believe that the maternity industry has a market size of about 200 billion, has the guiding support of national policies, and has the prospect of market expansion, but at present, there are no leading enterprises, and if we can take the lead in completing the layout of the upstream and downstream of the industry, then there is a bright future. After years of development, David Medical has become a leading enterprise in the baby care equipment market, accounting for 40% of the market share. And years of deep ploughing has also accumulated a lot of high-quality industry resources for David Medical, such as obstetrics and gynaecologists in major hospitals.
David Healthcare raised $400 million when it went public in 2012, of which more than 200 million was raised. Most of the money raised is still in the company's account and is well-funded. If David Medical makes use of its existing doctor resources, hospital resources and funds raised to make a breakthrough in the integration of the upstream and downstream of the maternity industry, it is expected to become the leader of the entire maternity industry in the future.
The company participates in Xi Rui and enters the field of stem cell storage, which we believe is the first step in the integration of the company's pregnancy and maternity industry in the future. In addition, the company signed the "Capital increase Agreement on Shenzhen Yanghe Biopharmaceutical Industry Investment Co., Ltd." with Yangpu Medical, Hejia shares, Lanfan Medical and Yanghe Investment, using its own funds to increase capital and invest 30 million yuan. invest in Shenzhen Yanghe Biopharmaceutical Industry Investment Co., Ltd., intended to build a professional investment platform, is expected to continue to break through in the industry in the future. We believe that the company is expected to continue to break through in the maternity industry in the future, and the integrated layout of pregnancy and childbirth may become a bright spot of the company in the future.
3. Profit forecast and investment suggestions.
It is estimated that the EPS from 2015 to 2017 will be 0.20,0.24,0.30 yuan respectively. Based on the closing price on August 10th, the market value is about 8 billion. We believe that the company is the target of obstetrics scarcity, and there is a huge prospect for the industrial layout of the integration of pregnancy and industry in the future, and there is still much room for improvement in the market value. The company's original baby care equipment business is growing steadily, the subsidiary is expected to enter the stapler market is expected to re-create a David, the potential market space of the maternity industry is inestimable. Driven by three aspects, there is broad room for the company's valuation to improve. The company participates in Xi Rui and enters the field of stem cell storage, which we think is the first step in the integration of the pregnant and maternity industry in the future, and the follow-up breakthrough is still worth looking forward to. In addition, the controlling shareholder, the actual controller and the chairman of the board of directors continue to increase their holdings in the near future, which demonstrates their firm confidence in the future development of the company, and also provides a relative margin of safety, which is worthy of investors' attention. We are optimistic about the future development of the company and maintain the "recommended" rating.
4. Risk hint.
The substitution of high-end baby incubator for similar imported products is lower than expected; the expansion speed of stapler business is lower than expected; and the progress of integrated layout of pregnancy and maternity industry is lower than expected.