IHealth products actively explore promotion model and profit model.
Ihealth product line is becoming more and more diverse, covering blood pressure, blood sugar, weight, fetal heart and other signs, and may be involved in respiratory, biochemical diagnosis and other fields in the future. In addition, Maternal and Child Monitoring (ibaby monitor) has also been upgraded. The development potential of the mobile medical market is huge, the company started early, but there are more and more competitors. At present, the company has a leading advantage in product diversity, software development, manufacturing, platform building and brand promotion. This field is in the ascendant, the product promotion model and profit model are not clear, Jiu'an is also actively trying to cooperate with hospitals, doctors, insurance and other participants, looking forward to exploring a smooth product sales path and profit model. To say the least, ihealth can become a fast follower of the industry, even if it doesn't lead the trend. Sales of ihealth products are expected to exceed $20 million in 2014 and $10 million in 2013.
The sales of blood pressure and blood glucose products in Jiu'an have continued to grow at a high level.
The growth of domestic sales is another highlight of the company's business. Jiuan sphygmomanometer has become the first sales brand of JD.com sphygmomanometer. The company started as an ODM, in cost control and manufacturing processes are significantly higher than other similar enterprises, so there is more price space to occupy the market. Benefiting from the growth of online business and the increase in sales categories, domestic business maintained high growth in 2013, with an estimated revenue of 160 million yuan, and is expected to reach 250 million yuan in 2014, the same as export business, achieving the strategic goal of "turning China into a foreign country."
The strategic position of traditional ODM business has declined.
As ihealth products are in the promotion stage and the domestic market is small, the traditional ODM business is still the main source of revenue and profit for the company at present. The reduction of traditional European business orders, rising costs and higher personnel costs have greatly affected the company's revenue and profits in the past two years. Things will improve in 2014, with orders expected to increase by 10%. From the perspective of strategic positioning, the traditional business is no longer the focus of the company's development, but only a piece of business that provides cash flow, and its status will gradually decline in the future development.
Conclusion:
The company's current sales scale and market capitalization are not large, but there is a lot of room for development, and the company has the potential to become bigger and stronger in terms of management, products and marketing, and it will be in a period of rapid growth in the next few years. So although the company's stock price is not "cheap" from PE's point of view, the unexpected surprises brought about by this growth from time to time will make investors feel "good value for money".
Maintain the company's profit forecast of 0.03 yuan and 0.11 yuan from 2013 to 2014, and maintain a strongly recommended rating. Risk tips: the risk that the progress of new products is not as expected; the risk of a sharp rise in costs; the increased risk of exchange losses; the risk of lower gross profit margin caused by the rise in raw material prices; the lifting of some restricted shares and the risk of reduction by shareholders.
For the basic situation of Jiuan Medical and our long-term view of the company, please refer to the Dongxing Securities Research report "Jiu'an Medical (002432): adding recruits to the ihealth Health platform" and "Jiu'an Medical (002432): traditional Business is gradually recovering." Innovation model is being explored "," Jiu'an Medical treatment (002432): export affected Brands should be self-strengthening "," Jiu'an Medical treatment (002432): looking at the long-term layout of the United States "," Jiu'an Medical treatment (002432): showing its skills in the future "," Jiu'an Medical treatment (002432): the small tender lotus has just revealed its tightly wrapped tip of leaves ".
