Events:
On April 3, 2018, the company released its 2017 annual report: the company achieved operating income of 2.006 billion yuan, an increase of 3.11% over the same period last year, and a net profit of 175 million yuan, an increase of 53.44% over the same period last year.
Comments:
Thanks to the smooth progress of core business and the smooth recovery of accounts receivable, the company achieved a year-on-year increase of 53.44% in 2017, basically in line with expectations:
In 2017, the company achieved a net profit of 175 million yuan, an increase of 53.44% over the same period last year. The company's performance successfully bottomed out, mainly due to two major aspects: (1) the order on hand in the hospital construction business has exceeded 6 billion yuan, and the order is now beginning to be gradually fulfilled; (2) the collection of accounts receivable in the previous period was smooth, and the loss of bad debts decreased from 61.5499 million yuan in 2016 to 10.259 million yuan in 2017, a decrease of 51.2909 million yuan.
The proportion of company fees decreased slightly in 2017, mainly due to a reduction in bank borrowing:
In 2017, the company's revenue from the three fees accounted for about 11.46%, a decrease of 0.79 percentage points. Among them, the proportion of management expenses and sales expenses remained stable, at 7.64% and 3.48% respectively, while financial expenses accounted for about 0.34%, down 0.66 percentage points from the same period last year, mainly due to the decrease in bank borrowing.
"Hospital construction order fulfillment + medical consumables sales", the company's core business is advancing smoothly:
In 2017, the company's performance contribution mainly came from hospital construction and consumables sales, accounting for 43.30% and 51.77% of revenue, respectively. Among them, the order on hand of the company's hospital construction business has exceeded 6 billion yuan, and the revenue of the hospital construction business in 2017 has exceeded 868 million yuan (555 million yuan for hospital design and construction, and 313 million yuan for medical equipment and professional engineering). An increase of 3.41% over the same period last year, the revenue of consumable materials sales business reached 1.039 billion yuan in 2017, an increase of 1.49% over the same period last year.
The hospital PPP model is well advanced, and the hospital operation business continues to thicken the company's performance:
The company's hospital PPP model is to obtain the right of hospital management by means of financing and construction, and then obtain long-term sustainable income through the distribution of equipment consumables or the collection of hospital management fees. The company aims to manage 30 hospitals within 3-5 years. At present, the company has managed several hospitals, and the hospital operating income is 60.9538 million yuan, an increase of 10.49% over the same period last year.
Profit forecast and valuation
According to the company's existing business situation, we estimate that the company's EPS in 18-19 is 0.33,0.41 yuan respectively, corresponding to 25 and 20 times PE, maintaining a "highly recommended" rating.
Risk tips: hospital construction order confirmation is not up to expectations, accounts receivable payback risk, buyer credit risk, industry policy risk.
