China's largest exporter of medical dressings, 88% for export. In 2019, the company's overseas business income was 2.08 billion yuan, accounting for 88%, an increase of 15.52% over the same period last year, and gross profit margin was 36.17%, an increase of 2.77% over the same period last year. The company's products are sold to the United States, Canada, Germany, Japan and other countries and regions, overseas customers mainly include Medline, Dukal, Hartmann, Lohmann & Rauscher, Medicom, Johnson& Johnson and other well-known enterprises. The company's leading position in the industry is stable, and the export volume of medical dressing products has been the first in the industry for 11 consecutive years.
Has a complete industrial chain, a high level of automation. The company has an international advanced production line, forming a complete industrial chain from substrate production to product deep processing, packaging, sterilization, testing and so on. In 2019, the annual production project of "600000 spindles of medical cotton yarn and 1.2 billion square meters of medical gauze" and the "production and construction project of medical and sanitary nonwovens" designed and operated by the company according to the concept of intelligence, information and automation have been completed and put into mass production. bring profit growth to the company. In the future, the company will continue to carry out technical transformation and upgrading of other existing production projects and management projects.
2020Q1 has a solid leading position with both growth in revenue and profits. Due to the surge in demand for protective equipment brought about by the COVID-19 epidemic, the company raised investment projects and put into production in 2019, and 2020Q1's revenue increased by 16% compared with the same period last year. Net profit increased by 65% compared with the same period last year, the fundamentals continued to improve, the leading position of the industry was solid, and the export volume of medical dressing products ranked first in the industry for 11 consecutive years.
The company is in the early stage of growth, and the three major businesses can maintain growth: international medical care, domestic medical care, and consumer goods.
In terms of international medical care, the company is the largest exporter of medical dressings in China, with excellent customer resources and a solid leading position; in domestic medical care, since 2019, the company has developed a number of large domestic hospitals as downstream customers. at the same time, through investment cooperation with the National Pharmaceutical Group to continue to tap the domestic market, the growth rate is fast. In terms of consumer goods, the company's "Shang Mian Ji", "an Zhi'ai" and other business lines have introduced products to the market, settled in Tmall and JD.com, and introduced the concept of health care quality on the basis of product quality advantages, which have been well received by consumers.
With the increase of industry concentration, the head enterprises continue to benefit. In 2019, a total of 6437 enterprises exported medical dressings, of which about 50 enterprises exported more than 10 million yuan and 6 enterprises exceeded 50 million yuan. Exports of the top 100 enterprises totaled US $1.716 billion, up 5.73% from the same period last year, and the concentration of the market has further improved. We believe that the industry concentration will further increase in the future, and head companies such as Ogilvy Healthcare will continue to benefit.
Profit forecast and valuation. We are optimistic about the company's leading position in the industry, and predict that the EPS from 2020 to 2022 will be 0.61,0.73 and 0.78 yuan respectively, giving the company a valuation of 52-54 times PE in 2020, and the corresponding reasonable value range is 31.72-32.94 yuan. For the first time, it is given a "better than the market" rating.
Risk hint. The risk of macroeconomic fluctuation, the risk of international environmental fluctuation, the risk of epidemic situation, the domestic market is not as expected, and the sales of consumer products are not as expected.