The company announces 21H1 results. The income of 21H1 increased by 83.7% to 1.772 billion yuan compared with 19H1, and the net profit of returning home increased by 8.8% to 199 million yuan compared with 19H1. The substantial increase in income was mainly due to the increase in income brought by Jinan heavy truck Hospital, Huaikuang Hospital and Runeng Hospital. The overall medical business income of 21H1 increased by 14.5% to 3.777 billion yuan compared with 19H1. The contribution of hospital profits increased by 11.1% to 358 million yuan compared with 19H1, and the contribution rate of hospital profits narrowed 0.3pct to 9.5% compared with 19H1.
And table hospitals: the medical business income of 21H1 Jiangong Hospital increased by 8.2% to 354 million yuan compared with 19H1, and the profit contribution rate decreased from 2pct to 15.5%. Compared with 19H1, the income of Huaikuang Hospital decreased by 5.6% to 384 million yuan, and the profit contribution rate increased from 5.3pct to 12.0%. The income of Runeng Hospital increased by 33.4% to 263 million yuan compared with 19H1, and the profit contribution rate increased to 3.0%. The income of Sinotruk Hospital reached 139 million yuan, with a profit contribution rate of 8.3%.
Non-amalgamated hospitals: the income of 21H1 Beijing Coal Hospital increased by 21.6% to 823 million yuan compared with 19H1, and the profit contribution rate increased from 5.1pct to 9.4%, mainly due to re-signing the agreement to establish a joint venture company, reducing the profit contribution of management and supply chain; the income of brain hospital decreased by 9.5% to 487 million yuan compared with 19H1, and the profit contribution rate increased from 1.1pct to 11.6%. The income of the two academies of WISCO fell 1.9 per cent to 460 million yuan compared with 19H1, while the profit contribution rate increased by 1.0pct to 5.5 per cent.
Profit forecast and investment rating. In 21 years, the new Huaiyin Hospital and the new IOT Hospital Zhiyi and Yueyanhua are added. The estimated annual income is 3.28 billion yuan (year-on-year + 19.3%) and 3.582 billion yuan (year-on-year + 9.2%) respectively, and the estimated net profit is 451 million yuan (year-on-year + 45.6%) and 513 million yuan (year-on-year + 13.7%) respectively. The latest stock price corresponds to 15.8 times and 13.9 times of PE for 21 years. China Resources Medical has rich experience in hospital management, through continuous mergers and acquisitions to improve the operational efficiency of existing hospitals with two-wheel-driven growth. The view of maintaining the fair value of HK $8.66 per share remains unchanged. Maintain a "buy" rating.
Risk hint. The epidemic has an adverse impact on offline hospitals; the expansion process is not as expected; the rapid development of Internet medical care has an impact on physical hospitals.