Event: the rapid outbreak of the COVID-19 epidemic in China in January 2020, during which the severity of the epidemic led to the growth of the company's mobile DR product sales.
The domestic COVID-19 epidemic has led to the high-speed expansion of mobile DR, and overseas outbreaks are expected to expand demand. Affected by the domestic epidemic situation of COVID-19, the procurement demand for domestic DR equipment, especially mobile DR, has risen sharply. As the leading company of domestic DR, the company's DR sales are expected to grow rapidly during the epidemic, with mobile DR growing more significantly; in addition, considering the concentrated outbreak of overseas epidemic, the company's DR equipment is expected to continue to increase rapidly, driving the company's Q2 performance to continue to grow rapidly.
The rich layout of imaging products helps the company's medium-and long-term growth: the company specializes in the research and development, manufacturing, production, and imaging diagnostic services of imaging medical devices, including DR, MR, CT, DSA, gastrointestinal machines, breast machines, color ultrasound and other product lines, among which traditional DR products are relatively robust and mobile DR devices are growing rapidly. After two years of market promotion, CT is expected to achieve small-scale expansion in 2020. MR meets different needs with two models of permanent magnet and superconductor, and is expected to achieve sustained and rapid growth. in addition, products such as DSA benefit from strong demand at the grass-roots level and are in the stage of rapid expansion. In addition, the COVID-19 epidemic is expected to accelerate the construction of domestic grass-roots health care. As a manufacturer of the whole product line layout in the field of medical imaging, the company is expected to benefit significantly and has a broad space for medium-and long-term growth.
Yum color ultrasound localization landing, is expected to begin to form sales this year: the company at the end of 2018 invested 100 million yuan to set up a wholly-owned subsidiary Wandong Yum, mainly based on Yum color ultrasound technology research and development of home-made color ultrasound equipment. At the beginning of March this year, Wandong Yum has obtained registration certificates for three series of color ultrasound, and a number of products are expected to appear on the market in the second half of the year. Considering the product quality and reputation of Yum, it is expected that Wandong's color ultrasound is expected to achieve rapid volume, share the domestic market of nearly 10 billion yuan, and further open up the future growth space of the company.
Profit forecast and investment advice: the company's net profit from 2019 to 2021 is expected to be 180 million yuan, 240 million yuan and 310 million yuan respectively. Considering that the company is a scarce target in the field of medical imaging equipment and has broad room for future growth, a comparable company in the reference industry will be given a 40-fold valuation in 2020, corresponding to the target price of 17.94 yuan, and a "buy" rating for the first time.
Risk tips: a sharp decline in industry demand, new product promotion may not be as expected.