The main business of infant care equipment is gradually restored.
The company's main industry of baby care equipment is in the lead in China, and the company's overall sales revenue declined in 2013 due to a decrease in government investment in baby care equipment in the domestic market compared with the same period last year. At present, on the one hand, a series of reasons, such as the two-child policy, the promotion of medical reform and the state's encouragement of the use of domestic equipment, have gradually warmed up the demand market, on the other hand, the company continues to improve its competitiveness through product upgrades. The listing of high-end new products such as YP-2005 and YP-2008 baby incubators in 2014 enriched the company's product line. The products under research, such as two-in-one warm box, neonatal T-combination resuscitator and multi-layer optical fiber braided blue light blanket, are all domestic innovations. The company's main business of baby care equipment is gradually recovering.
Subsidiary stapler business to create a new profit growth point
The stapler products of the subsidiary company won the medical device registration certificate in May 2015. the current market size of the stapler is about 5 billion, and it is expected to reach 10 billion by 2018, which is expected to become a new profit growth point of the company. the company plans to increase the sales revenue of the stapler business to 300 million in 3-5 years.
Valuation and investment advice
The company expects to achieve EPS of 0.21,0.26 yuan in 15 and 16 years. Based on the closing price of 18.04 yuan on September 18, the dynamic PE is 86.04 times and 69.13 times respectively. The average 15-and 16-year price-to-earnings ratios of listed companies in medical device industry are 54.33 times and 56.48 times respectively. The company's current valuation is higher than the industry average. The company's main business of baby care equipment is expected to recover steadily, and the subsidiary stapler business has a broad market prospect, and it intends to carry out extension development around the maternal industry in the future. at present, it has opened the layout of integrated services for pregnancy and childbirth from investing in stem cell storage business. to lay the foundation for the diversified development of the company in the future. We are optimistic about the development of the company for a period of time in the future and give it a rating of "prudent overweight".
Main risk
The sales of new products are not as expected; the progress of products under development is slow; the risk of entering new areas.