Incident: The company achieved revenue of 7.634 billion yuan in the first three quarters of 2022 (+15.0%, year-on-year growth rate in parentheses, same below); net profit of the mother was 306 million yuan (-4.9%), after deducting non-net profit of 289 million yuan (-7.57%).
Q3 performance improved rapidly, and profitability continued to improve: the company achieved revenue of 2,873 billion yuan (+19.9%) in Q3 in a single quarter and net profit of 146 million yuan (+23.9%); revenue and net profit growth rates of Gumo's net profit were 10.8% and 23.9%, respectively; the impact of the Q3 company's epidemic in Shanghai, Shandong and other places was eliminated, and the company's performance continued to recover rapidly. Looking at profitability, the company's Q3 gross margin increased 1.97pct to 27.76% year on year, and net sales margin increased 1.23pct to 8.09% year on year; profitability increased rapidly.
DRG, collection, etc. will not change the high growth rate of laboratories. Intensification is in line with the development trend: policies such as DRG and collection are aimed at increasing the clinical value of testing, not simply suppressing test prices, so we believe that 1) In the future, more advanced methodological tests will gradually replace low clinical value programs, and accurate testing can reduce back-end treatment costs. Furthermore, under the general trend of aging, the 2017-2021 medical insurance expenditure CAGR is 14.5%. Even if some testing items are collected, the overall testing market size can still maintain relatively rapid growth as more special testing programs are released. As testing programs increase and testing methodologies are upgraded in the future, intensification will provide more incremental services in line with development trends, and customer stickiness will be strong.
Industrial sector epitaxial +endogenesis, the matrix is gradually forming: the company achieved rapid establishment of an industrial product matrix through independent development+epitaxial mergers and acquisitions, gradually covering sectors in IVD special technology fields; 1) Major cooperation with Orcendo established a subsidiary to operate and develop immunological diagnostic products, which is expected to provide 100 to 100 million yuan in revenue in 2022; and the subsidiary Huizhong Diagnosis will provide OEM production services for related products to provide incremental revenue; 2) The revenue of glycated blood glucose meters is 130 million yuan in 2021, and is expected to maintain 30% +AGCR in 2021-2024 after the launch of the new model; 3) The self-developed triple quadrupole mass spectrometer system was launched at the end of 2021 and is expected to provide 10 million product revenue in 2022; 4) Other pipelines such as quality control products and biochemicals will maintain steady growth. Taken together, we think the company's industrial sector will maintain a CAGR of around 30% from 2021 to 2024.
Profit forecasting and investment ratings: We maintain net profit expectations of 4.2, 570, 708 million yuan for 2022-2024, and P/E valuations for 2022-2024 are 15X, 11X, and 9X respectively; based on the expansion of the company's commercial sector intensive model, it is deeply tied to Sinopharm, and various pipelines in the industrial sector have accelerated the release of various pipelines in the industrial sector; and maintained the “buy” rating.
Risk warning: policy risks such as DRG/DIP; promotion of intensive models falls short of expectations; promotion of industry 1 industry lines falls short of expectations; uncertainty about Chinese pharmaceutical cooperation, etc.