The company is a professional provider of biopharmaceutical automation, intelligent control system equipment and overall solutions. Its business segments include pharmaceutical bioautomation and rehabilitation medical devices, and its performance is good. The company entered the rehabilitation medical device sector through the acquisition of Long Zhijie in '17 and completed an integrated two-wing, two-wheel drive business layout. The company's performance has been growing steadily in the past three years. Revenue for the years 16-18 was 37,305, 55,513, and 689.13 million yuan, respectively; YOY was 8.29%, 48.80%, and 24.14%, respectively; net profit for 16-18 was 5,374, 8,960, and 102.3 million yuan, respectively, and YOY was 0.27%, 66.74%, and 14.18%, respectively.
The company's shareholding structure is clear, the actual controller has not changed, the governance structure is stable, and most of the executive team are from business. Currently, the largest shareholder of the company is Beijing Liwei Investment Co., Ltd., with a shareholding ratio of 25.81%. The second largest shareholder is Chairman Liang Xuexian, with a shareholding ratio of 6.78%, and holds 46.90% of the shares of Beijing Liwei Investment Co., Ltd. The actual controllers of the company are Leung Hok-yin and Leung Kai's father and son, holding a total of 36.32% of the shares.
The pharmaceutical bioautomation sector has always been the company's main business, with steady growth. In 2018, business revenue reached 524.19 million yuan, a year-on-year increase of 17.86%, accounting for 76% of revenue. The sector's gross margin level has remained stable in the 30%-35% range all year round. In the process of industrial upgrading and strategic transformation to achieve sustainable growth in the pharmaceutical industry, the industrial automation industry plays an important role, and the industry is growing rapidly. The company started early, has advanced technology, has achieved full process coverage, and has gradually improved the layout of industry segments through acquisitions, and its comprehensive core competitiveness continues to increase.
In 2017, the company completed the acquisition of Long Zhijie and entered the rehabilitation medical device industry. In 2018, business revenue reached 165.11 million yuan, yoy +29.84%, net profit 56.62 million yuan, yoy +45.31%. As the aging population grows and demand for rehabilitation medicine increases, the rehabilitation medical device industry has great potential. The company's business covered six major fields. At the end of 2018, the number of products sold exceeded 40, mainly medium-sized rehabilitation medical devices, and its gross margin was higher than that of other comparable listed companies. The company's product sales cover more than 30 countries around the world, enter more than 3,000 domestic medical institution users, cover more than 70% of the top three hospitals, and is expected to enjoy the industry's high growth dividends.
The majority shareholder Liweite Investment Holdings Beijing Jianji Rehabilitation Technology Co., Ltd. Chiropractor is an extension of rehabilitation medical devices to offline rehabilitation medical services. It has set up a sports rehabilitation center in Beijing, further improved the rehabilitation business section, and will become an overall rehabilitation medical solution service provider. Chiropractor's physical therapy and rehabilitation services cover the entire population, service products are scarce, and the market space is vast.
Profit forecast, valuation and investment rating: The company's revenue for 2019-2012 is expected to be 84,393/102,341/123,604 million yuan, respectively, with a year-on-year growth rate of 22.46%/21.27%/20.78%, respectively. The net profit to the mother was 12,400/14,700/1732 million yuan, the compound annual growth rate was 19.03%, and the PE corresponding to the current stock price was 30/25/22 times, respectively. Referring to comparable listed companies in the same industry, we gave the company 36 times PE in 2019. The corresponding reasonable stock price was 16.45 yuan, which is 20% more than the current price. For the first time, we covered the “recommended” rating.
Risk warning: The development of the medical rehabilitation industry falls short of expectations, competition in the industry intensifies, and the expansion of new customers falls short of expectations.