Main points of investment:
The service leader of laboratory department of public hospital, the extension of industrial plate. Runda Medical was founded in 1999, the business includes integrated service platform system business, IVD and other product development and manufacturing and digital inspection information system business. The company has a foothold in East China and radiates the whole country, and now it has become the leader in the comprehensive management service of the laboratory department of domestic public hospitals. The company's main products include quality control products, saccharification, biochemistry, mass spectrometer, POCT and so on. Some products realize the whole industry chain model of "R & D-production-circulation-service", and the company's second growth curve has been constructed.
Multiple factors drive the business growth of the company's commercial sector: (1) steady growth of the industry: the inspection income of public hospitals has increased steadily for many years, and the proportion of hospital inspection income has increased year by year, except during the epidemic period. The industry growth rate is stable between 10% and 15%. (2) Industry centralization: in the current environment, it is expected that the "relationship-dependent" small and medium-sized dealer agency model will be phased out, and the share of IVD integrated services platform enterprises will continue to increase; (3) Model replication: the company's intensive business is highly replicable, and the cooperation model between the company and Sinopharmaceuticals has been proved successful and is expected to be promoted nationwide in the future. (4) New flexibility of LDT contribution: the pilot project of LDT has been launched in Shanghai, and the company is expected to be deeply involved in the co-construction of LDT labs. According to our estimates, the profit contribution in Shanghai can reach 0.9-180 million yuan.
With the high growth of the industrial plate, the pipeline has entered the harvest period: (1) the company's industrial plate adopts the characteristic and differential layout, and the current income mainly comes from glycosylated hemoglobin, quality control products and information products, among which the domestic share of saccharification and quality control ranks first. In addition, the company has also laid out the layout in some emerging technology areas (such as sequencing, mass spectrometry, allergen detection, biomarkers of special diseases, etc.). (2) the company's mass spectrometer was put on the market in 2021, and the installation was delayed due to the epidemic in 2022. It is expected that with strong channel capacity, the company will gradually promote the installation of mass spectrometers centered in Shanghai in 2023 under the environment of gradual recovery of the epidemic and LDT pilot in Shanghai. (3) through the combination of industry, university and research, the company has built a rich R & D pipeline, and the proposed depression detection products will break the market gap. (4) CMO/CDMO business: the cooperation between the company and the international giant Orson is advancing, and the launch of CMO/CDMO business will significantly increase the performance of the industrial sector.
It is optimistic that the company will recover after the epidemic, covering it for the first time and giving it a "buy" rating. The COVID-19 epidemic in 2022 led to a decline in the growth rate of both the company's commercial and industrial sectors, and we expect downstream demand to recover significantly in 2023 with the adjustment of domestic epidemic control measures. We estimate that the company's operating income from 2022 to 2024 will be 10.267 billion yuan, 12.098 billion yuan and 14.465 billion yuan respectively, with year-on-year growth rates of 16%, 18% and 20% respectively, and the net profit will be 416 million yuan, 514 million yuan and 640 million yuan respectively, with year-on-year growth rates of 9% and 24% respectively. The corresponding price-to-earnings ratios are 16 times, 13 times and 10 times respectively. Through segment valuation, we calculate that the reasonable market capitalization of the company is 10.28 billion yuan, including 2.38 billion yuan for the industrial sector and 7.9 billion yuan for the commercial sector. Compared with the market capitalization of 6.5 billion yuan corresponding to the closing price on December 8, 2022, there is 58% room for increase, covering it for the first time and giving it a "buy" rating.
Risk tips: epidemic fluctuation risk, collection and acquisition price reduction risk, competition aggravating risk, R & D risk