Main points of investment:
1. The company actively arranges the in vitro diagnosis business, the medical section will break out, and it will be further laid out around precision medical care in the future. The company began to lay out the medical section in 2014, first holding Fujian New Continental Biotechnology Co., Ltd. began to enter the market of in vitro diagnostic reagents, and then set up Xilong Medical Diagnostic Center. Yonghe Sunshine Biotechnology Co., Ltd. was controlled through Xilong Equity Investment Fund; in 2015, the company established Xilong (Shanghai) Medical Technology Co., Ltd. to represent the domestic sales of major international brands. In 2016, it will acquire a 15% stake in Fulgent and establish a joint venture with Fujun Genome Technology Co., Ltd., which is involved in in vitro diagnostics such as molecular diagnostics and genetic testing, and the company will continue to expand in the field of precision medicine in the future. The company has just announced the acquisition of the remaining 25% of the shares of New World, which is expected to contribute 20 million of profits this year; Xilong (Shanghai) Medical Technology Co., Ltd. reached 80 million in revenue in the first half of last year, and is expected to greatly increase its profits this year; Fulgent, which made a profit of US $4.21 million last year, is likely to double this year and contribute nearly 10 million to the company. Considering only these three pieces, the medical section will contribute 3000 to 50 million of the company's profits this year, which will increase by 1-3 times compared with the same period last year, based on 14.65 million of the profits contributed by New World and Xilong (Shanghai) last year.
two。 The traditional business is growing steadily and exploring the e-commerce model. The company's traditional business is chemical reagents, chemical raw materials, etc., raising investment projects 50, 000 tons of PCB chemical reagents and 10, 000 tons of ultra-clean and high-purity chemical reagents have reached production in the middle of last year, and sales of high-margin products will increase this year. At the same time, the company is actively exploring the e-commerce model of chemical raw materials and chemical reagents. Liaowang and Dr. Mao were both online last year. Youmia.com is mainly a B2B website for bulk chemical raw materials, which has exceeded 500 million since it was launched in September last year, and has received investment from Fosun Kunzhong in round A financing. Its business model is not a matchmaking model, but a model similar to that of dealers, so it can also obtain price differential income. Dr. Mao is mainly the sales of chemical reagents, which is currently being promoted in scientific research institutions.
Valuation and investment advice:
Revenue in 2015 was 2.513 billion, up 14.36% from a year earlier, with a net profit of 90.79 million, up 17.11% from a year earlier. Revenue in the first quarter of 2016 was 486 million, down 3.58% from a year earlier, and net profit was 16.05 million, up 24.76% from a year earlier.
We think the company's medical section will break out this year, contributing 20% of the company's profits to 30%. The company is expected to have an EPS of 0.254, 0.3709 and 0.479 yuan in 2016-2018, with a "buy" rating.
Risk tips: 1. Macro-economic decline, the company's traditional business decline; 2. The market promotion of in vitro diagnostic reagents is not as expected.
