Event: the company issued shares to purchase assets and raised supporting funds and related transactions were conditionally approved.
Set up "branding and collectivization" and cut into the field of private medical services
In 2015, the company made a clear transition to a large health industry with the combination of medicine and care, drawing lessons from the "branding, collectivization" operation of American HCA hospital, improving hospital operation mode, upgrading infrastructure construction, strengthening information management, and forming a strong brand effect. Comparable to the US HCA hospital, its 10 institutions have a profit margin of more than 25 per cent, much higher than other private profit-making institutions. This transaction enables the company to cut into the field of private medical services, control and operate mature hospital assets, and initially realize the multi-main business pattern of building ceramics, health building materials and large health industries.
Medical market at prefecture and county level is the best choice to realize differential competition.
In 2015, China's county-level hospitals covered 65.7% of the population with 20.7% of doctors, and the county-level medical resources were scarce. at the same time, "graded diagnosis and treatment" proposed to increase the consultation rate in the county to 90% by 2020, basically realizing that "serious diseases do not come out of the county." Compared with large urban areas, the competition pattern of prefectural and county-level medical market has not yet been formed, medical resources are scarce, the development space is huge, and the graded diagnosis and treatment policy promotes the demand for medical services to return to small and medium-sized cities. The limited payment kiosks involved in this transaction, Quanjiao Co., Ltd. and Jianchang Co., Ltd. are all county-level private for-profit medical institutions, and they are all second-class or second-class general hospitals, which can form differentiated competition and radiate the grass-roots level. constitute the core link of the company's "regional health complex" operation model.
The integration and layout of medical service resources will continue
The company actively integrates cross-strait medical and pension resources, and has previously laid out in high-end medical care, chain specialties, pension and academic fields, employing a number of experts and scholars as company executives. This transaction is the most important and solid business layout since the implementation of the great health strategy. it is expected that the company will continue to further cover the field of medical services through epitaxial mergers and acquisitions in the future. At present, the company's medical services account for more than 30%. This proportion will continue to increase in the future.
Profit forecast and investment advice
It is expected that the asset restructuring will be completed in 18 years, and the company will be retroactively adjusted for 17 years (after the reorganization). It is estimated that the EPS of the company in 2017-2019 will be RMB 0.06, 0.10, 0.12 yuan, corresponding to PE of 89.6, 56.6, and 47.1 times, with a target price of 6.50 yuan, maintaining the "overweight" rating.
Risk hint: epitaxial mergers and acquisitions are not as expected