What happened: the company released its 2020 annual report and 2019 quarterly report. In 2019, the company achieved revenue of 2.352 billion yuan, an increase of 16.03% over the same period last year, and a net profit of 326 million yuan, an increase of 43.04% over the same period last year. The net profit after deducting non-return was 276 million yuan, up 34.14% over the same period last year. From a quarterly point of view, 2019Q4 achieved revenue of 641 million yuan, an increase of 10.54% over the same period last year, and net profit of 108 million yuan, an increase of 24.18% over the same period last year. Net profit of 80.8962 million yuan was deducted from non-return, an increase of 0.24% over the same period last year.
In the first quarter of 2020, the company achieved operating income of 598 million yuan, an increase of 16.23% over the same period last year, and a net profit of 91 million yuan, an increase of 64.62% over the same period last year. The net profit of non-return was 88 million yuan, an increase of 92.58% over the same period last year. The net cash flow generated by operating activities was 351 million yuan, an increase of 590.62% over the same period last year. The outstanding performance is mainly due to the outbreak of COVID-19 's epidemic, the substantial increase in demand for infection protection products such as masks and other basic consumable products, and the increase in sales of such products.
Sustained R & D investment brings driving force for future growth
From a product point of view, the company's main operating income comes from wound and bandaging care products. In 2019, the operating income reached 1.318 billion yuan, an increase of 5.94% over the same period last year, accounting for 56.03% of revenue and 39.54% of gross profit margin, an increase of 3.51pp over the same period last year. The revenue of surgery / surgical products reached 512 million yuan, an increase of 22.44% over the same period last year, accounting for 21.75% of revenue, with a gross profit margin of 26.50%, an increase of 2.88ppm over the same period last year; revenue of combined package products reached 96 million yuan, an increase of 39.85% over the same period last year; and revenue of infection protection products reached 62 million yuan, an increase of 22.06% over the same period last year.
In 2019, the company increased the development of emerging market markets, including the Middle East market, Asia-Pacific market and African market, and achieved certain results. As a result, the company's export business continued to grow, with overseas business revenue of 2.08 billion yuan, an increase of 15.52% over the same period last year, and a gross profit margin of 36.17%, an increase of 2.77pp over the same period last year. The revenue of domestic business reached 273 million yuan in 2019, an increase of 20.05% over the same period last year.
The company's R & D investment in 2019 was 55.315 million yuan, an increase of 11.21% over the same period last year, mainly for new or high-value consumables, equipment automation, information, intelligent transformation, and the upgrading of production processes. In 2019, the company was granted 24 patents and 2 software copyrights. As of April 22, 2020, the company has 84 patents and 2 software copyrights.
Maintain a "buy" rating
The company is one of the few enterprises in the industry with a complete industrial chain and a high level of automation. We estimate that the annual net profit of the company in 20-21-22 is 4.29,5.59 and 711 million yuan respectively, and the EPS is 1.02,1.32,1.68 yuan respectively. The current stock price corresponds to 32,25,20 times of PE, maintaining the "buy" rating.
Risk hint
Export income accounts for a relatively high risk; raw material price fluctuation risk; exchange rate fluctuation risk; international situation change risk.