Main viewpoints
1. Invest in American Fulgent and use foreign technology to enter the domestic market.
The company invests in Fulgent, an American genetic sequencing company with its own capital, and accounts for 15% of Fulgent after the investment is completed. at the same time, the company and Fulgent set up Fujun Genome Company in China, mainly engaged in genetic testing and diagnosis. Fujun Gene will introduce the advanced and mature gene sequencing technology and services of Fulgent Company of the United States, promote and operate in China, and provide world-class gene diagnosis services for domestic medical institutions and general consumers.
two。 In the field of medical and health care, mergers and acquisitions continue.
The company entered the field of medical health on a large scale through the acquisition of in vitro diagnostic reagent company Fujian New World in 2014, and then bought shares in Yonghe Sunshine through equity investment funds. In 2015, the company planned to acquire Shanghai Bessie and Fuzhou Xinbei, although the acquisition failed in the end. However, it is sufficient to demonstrate the company's strategy and determination in the field of health care, and the company will continue to acquire high-quality in vitro diagnostic reagent companies in the future. Improve the company's layout in the field of in vitro diagnostic reagents and enhance the core competitiveness of in vitro diagnostic reagents business.
In 2015, the company established Xilong (Shanghai) Medical Service Co., Ltd., which achieved business income of 80 million yuan in only half a year and developed rapidly. It is expected that Xilong medical revenue and profits will increase significantly in 2016, becoming a new profit growth point of the company.
3. E-commerce platform "Dr. Mao online", "material network" online operation, "material network" won Fosun capital increase.
The original customers of the company's chemical reagents were mainly concentrated in the industrial field, and the sales proportion of laboratory chemical reagents was relatively small. The company appointed Mr. Chen Biao, the general manager of Chinese medicine reagents, a leader in the domestic laboratory chemical reagents industry, as the CEO of the company, which helps to improve the company's ability in the channel, production and supply chain of laboratory reagents. The sales of laboratory chemical reagents are expected to make a breakthrough. The company's laboratory product e-commerce platform "Dr. Mao Lab" was officially put into operation in December 2015.
4. The steady growth of electronic chemicals, Foshan base put into production to break the capacity bottleneck.
Foshan base, a listed investment project, was put into production in 2014. Foshan base has 50, 000 tons of PCB chemical reagents and 10, 000 tons of ultra-clean high-purity reagents. After the Foshan base was put into production, the company's electronic chemicals production capacity has greatly increased, and the company's electronic chemicals revenue growth is expected to increase in 2016.
5. Profit forecast and rating:
We estimate that in 2016-2017, the company's EPS will be 0.6,0.7 yuan respectively, corresponding to PE 64X and 55X respectively. The company will invest in Fulgent, a US gene sequencing company, and enter the domestic gene sequencing market with Fulgent's advanced and mature technology. IVD business will achieve growth through continuous mergers and acquisitions. We are optimistic about the company's development prospects and give it a "recommended" rating.
