Events:
On January 30, 2018, the company officially issued an annual performance forecast: the company is expected to achieve a net profit of 5707.20-73.8579 million yuan in 2017, an increase of-15% and 10% over the same period last year.
Comments:
The expected performance is basically the same as in the same period last year, and the performance is slightly lower than expected due to factors such as higher raw material prices and exchange rate fluctuations:
The company's net profit is expected to be 5707.20-73.8579 million yuan in 2017, which is basically the same as that in the same period last year. The main reasons for the lower-than-expected performance are as follows: (1) the increase in the price of raw materials for hemodialysis has led to a slight decrease in the gross profit margin of the product. The gross profit margin of the hemodialysis powder dropped from 35.47% in 2016 to about 34.46% in 2017. (2) the monitor business accounts for a relatively high proportion (about 30%), and mainly exports, exchange rate fluctuations lead to an increase in exchange losses.
In 2017, the company firmly implemented the strategic plan of "strengthening medical monitoring equipment, establishing and improving the hemodialysis ecosystem":
From the perspective of strategic implementation, in 2017, the company firmly implemented the strategic plan of "consolidating medical monitoring equipment, establishing and improving the hemodialysis ecosystem". In terms of hemodialysis business, the upstream production terminal company has basically completed the layout of hemodialysis production bases in South China, East China, Central China, North China, Northeast China, Southeast China and other regions through integration and self-construction. In addition, the downstream hemodialysis server cut into the pilot nephropathy specialist hospitals with high patient density markets such as Guangdong and Hunan, and is currently operating smoothly; in terms of medical monitoring, by readjusting the sales strategies of domestic and foreign markets, and actively develop emerging markets such as Africa.
The future hemodialysis layout prospect is excellent, and the short-term performance growth rate will be affected, which will not hinder the long-term investment value of the company:
At present, the size of the hemodialysis market is up to 300-40 billion yuan, the concentration of the upper, middle and lower industries is scattered, and there are few industry integrators. The company firmly ploughs the hemodialysis industry in the mode of the layout of the whole industry chain, and the short-term rise in raw materials and other factors are bound to accelerate the integration and concentration of the industry. On the one hand, with the commissioning of new bases such as Jiangxi and Tianjin, the scale effect of hemodialysis production is expected to offset the impact of production costs on gross profit; on the other hand, the company actively avoids foreign exchange risk, short-term factors do not hinder the company's long-term investment value.
Profit forecast and valuation:
Based on the company's existing business situation, we slightly lower our profit forecast to estimate that the company's EPS for 17-19 is 0.47max / 0.59 / 0.71 respectively. The current market capitalization corresponds to 41-33-27 times PE, maintaining a "highly recommended" rating.
Risk Tips:
The distribution of hemodialysis powder is not up to expectations; the risk of medical malpractice; the risk of policy change; the drag of the monitoring business on the overall performance.