Events:
On October 30, 2017, the company released its third-quarter results report: in the first three quarters of 2017, the company achieved operating income of 1.514 billion yuan, an increase of 10.73% over the same period last year, and a net profit of 145 million yuan, an increase of 11.18% over the same period last year. Non-net profit increased by 7.11%. Of this total, Q3 achieved a revenue of 498 million yuan in 2017, down 3.66% from the same period last year, and a net profit of 49.52 million yuan, an increase of 5.27% over the same period last year:
In the first three quarters of 2017, the results increased by 11.18% compared with the same period last year, showing a good recovery:
The company's performance fell short of expectations in 2016 (net profit fell 4.12% compared with the same period last year). The main reasons are: 1) some hospital construction projects failed to be settled on time; 2) the increase in accounts receivable led to more provisions for bad debts. In the first three quarters of 2017, the company achieved a net profit of 145 million yuan, an increase of 11.18% over the same period last year, and an impairment loss of assets of-43.65 million yuan, a decrease of 266.98% over the same period last year, indicating that the company's orders gradually began to cash in its income, and the previous accounts receivable were recovered smoothly, and the performance recovered well.
"Hospital construction orders cash + medical consumables sales", the company's annual performance is expected to hit bottom and rebound:
In the short term, the company's performance contribution mainly comes from two major businesses: hospital construction and consumables sales. Among them, the company's hospital construction business orders have exceeded 6 billion yuan, the current order has gradually cashed in income. In 2017, H1 achieved revenue of 527 million yuan, an increase of 31.75% over the same period last year, and is expected to exceed 1 billion yuan in revenue for the whole year. Consumables sales mainly provide disposable surgical bags and other consumable materials. H1 achieved revenue of 425 million yuan in 2017, an increase of 15.88% over the same period last year. Revenue is expected to exceed 800 million yuan last year. In view of the good recovery of sales growth in hospital construction and medical consumables sales, full-year results are expected to bottom out and rebound.
The hospital PPP model is progressing well and is expected to continue to thicken the company's performance in the long run:
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 goal of the company is to manage 30 hospitals within 3-5 years. At present, the company has managed several hospitals and has effectively docked management personnel and other resources for hospitals or carried out corresponding consumable distribution business one after another. The overall progress is good, and it is expected to continue to thicken the company's performance in the long run.
Profit forecast and valuation:
According to the existing business situation of the company, we estimate that the EPS of the company in 17-19 is 0.26,0.31,0.37 yuan respectively, corresponding to 38,32,27 times PE, giving a "highly recommended" rating.
Risk tips: hospital construction order confirmation is not up to expectations, accounts receivable payback risk, buyer's credit
