Key points of investment
Event: The company announced the results for the first quarter of 2017 on April 26.
The reviews are as follows:
The performance continued to decline by 17.58% and is still within the medium to short term pressure range. The company released its 2017 quarterly report, achieving revenue of 109 million yuan, a year-on-year increase of 3.94%, and revenue stabilized; Guimu's net profit was 5.94 million yuan, down 17.58% from the previous year. The decline in performance was mainly due to the joint venture Shenzhen Yanghe's investment income falling by 169.66% compared to the same period last year. Corresponding to EPS was 0.02. The company's performance was within the scope of the previous first-quarter forecast. By product, the company's vacuum blood collection system achieved revenue of 61.42 million yuan. The revenue contribution of the non-vacuum blood collection system was 54.31%, an increase of 7.37% over the previous year. The non-vacuum blood collection system was mainly due to some products. The discontinuation of proxies led to a 0.14% drop in revenue.
Continue to increase research and development and promote the medical “product+service” strategy in an orderly manner. The company has been in a year of transformation for the past three years. There has been a lot of investment in R&D. The long certification cycle for some products has put some pressure on performance, but it has not affected the company's development strategy from a single medical device manufacturer to a large medical group of “medical products+medical services”. The company will focus in an orderly manner around “clinical laboratory specimen solutions and diagnostic platforms, imaging diagnostic platforms, nursing and anesthesia product platforms, biomedical and pharmaceutical intermediates product platforms, and health management platforms. The company's current total scale is 6. The 100 million yuan M&A fund and the issuance of 300 million bonds are ready for extended mergers and acquisitions at any time.
The actual controller plans to increase its holdings by 1 to 10 billion yuan, demonstrating confidence in future development. The company was in a stage of historical change and rapid development in 2017. Based on confidence in the company's future development prospects, the actual controller, Mr. Deng Guanhua, and senior management of the company plan to increase their stock holdings by 1 to 1 billion yuan within the next 24 months (the current market capitalization is only 3.6 billion dollars, 2.7%-27% of the total share capital) and promise not to reduce their holdings of the company's shares within 6 months.
Profit forecast: Based on the impetus of hospital operation after Yizhang County Hospital of Traditional Chinese Medicine completed business registration in January 2017, the steady increase in vacuum blood collection performance, and the gradual release of early research and development in the second half of the year, we forecast that 17/18 revenue for the next two years will be 586 million and 67.09 million respectively, and the net profit of the mother will be 4839 million and 67.09 million respectively, up 58.76% and 38.65% respectively, corresponding to EPS 0.157 and 0.217; at the same time, considering the rich experience and advantages of the company's management and the ambition, determination and confidence of outreach development, we give The company's 86 PE in '17, corresponding to the target price of 13.48 yuan, corresponding to the current price to the “increase in holdings” rating.
Risk warning events: risk of expansion in the medical service sector; risk of extended mergers and acquisitions; risk of sales in overseas markets