Core viewpoints
The company is the leader of domestic pelvic floor and postpartum rehabilitation equipment industry. on the basis of traditional electromagnetic stimulation products, the extended layout of reproductive rehabilitation products is expected to provide a new driving force for the company's sustained growth. The company recently issued an equity incentive plan, and the performance evaluation goal is to take 2022 as the base, and the growth rate of return net profit (excluding share payment fees) in the four fiscal years from 2023 to 2026 is not less than 30%, 69%, 120%, 186%, respectively, demonstrating the company's long-term development confidence.
In the short term, after the release of the epidemic, the company's operation is expected to gradually return to normal, and the self-developed new magnetic stimulation products are expected to drive high growth; in the medium term, the company's traditional pelvic floor electromagnetic stimulation products are expected to maintain high growth. New products in the field of reproductive rehabilitation and sports rehabilitation, such as ultrasonic therapeutic apparatus, ultrasonic uterine involution apparatus, finger joint rehabilitation evaluation system, are expected to create a second growth curve. In the long run, the penetration rate of rehabilitation equipment industry is low, and the company is expected to continue to increase market share by virtue of product power, channels, services and other advantages in the future.
Event
The company issues the 2022 results KuaiBao and the 2023 draft restricted stock incentive plan
On February 26, 2023, the company released its 2022 results, KuaiBao. The annual operating income, net profit and non-return net profit were 3.77,1.23 and 89 million yuan respectively, up 10.28%, 3.93% and-14.70% respectively over the same period last year.
On February 26, 2023, the company issued a draft restricted stock incentive plan for 2023, which proposes to grant a total of 3.3 million shares to the incentive object, accounting for about 3.30% of the company's total equity, and set a performance evaluation target. Based on 2022, the growth rate of homed net profit (excluding share payment fees) in the four fiscal years 2023-2026 is not less than 30%, 69%, 120%, 186%, respectively.
Brief comment
Under the influence of the epidemic, the performance in 2022 is in line with expectations
According to the company announcement, the operating income, return net profit and non-return net profit of Melland in 2022 were 3.78,1.23 and 89 million yuan respectively, an increase of 10.28%, 3.93% and-14.70% respectively over the same period last year. Based on this calculation, the operating income and net profit of 2022Q4 are 0.78 yuan and 25 million yuan respectively, an increase of-29.36% and-38.85% respectively over the same period last year. Considering the impact of the domestic epidemic policy adjustment on the rehabilitation department at the end of 2022, we believe that the company's annual performance is basically in line with expectations.
Equity incentive plan issued to demonstrate long-term confidence in development
According to the company announcement, it is proposed to grant a total of 3.3 million shares, accounting for about 3.30% of the total share capital of the company, and to grant a total of 97 people for the first time, accounting for about 20.08% of the company's total 483 active employees at the end of December 2021. Including directors, senior managers, core technical personnel and other personnel, the grant price of restricted shares is 21.16 yuan per share. The company has also set performance evaluation targets, taking 2022 as the base, and the growth rate of net profit (excluding share payment fees) in the four fiscal years from 2023 to 2026 is not less than 30%, 69%, 120%, 186%, respectively, demonstrating confidence in the long-term development of the company's performance.
Pelvic floor and postpartum rehabilitation equipment leader, product layout gradually improved
The company is mainly engaged in the R & D, production and sales of related products in the field of pelvic floor and postpartum rehabilitation, such as pelvic floor and postpartum rehabilitation equipment (electrical stimulation, magnetic stimulation products), consumables and accessories, information products and so on. widely used in medical institutions such as obstetrics and gynaecology, pelvic floor rehabilitation center, month center, mother-child center and so on. China has a large number of pregnant women and suitable women, and there is a huge demand for pelvic floor and postpartum rehabilitation services. According to the data of the head Leopard Research Institute, the market scale of China's postpartum rehabilitation equipment industry is expected to reach 14.48 billion yuan (calculated by terminal sales) in 2023, and the CAGR is about 30% in 2018-2023. The industry is in a period of rapid growth. As an industry leader, the company has obvious first-mover advantages. in recent years, with the approval of self-produced magnetic stimulator and other new products, it is expected to gradually increase the market share.
Extend the distribution of reproductive rehabilitation and other areas to provide a new driving force for performance growth. China has a large population base of infertility, abortion and postpartum, and the market for reproductive rehabilitation is potentially huge. Based on the industry experience, technical accumulation and rich channel resources in the field of pelvic floor and postpartum rehabilitation for many years, the company has actively extended the layout of reproductive rehabilitation, sports rehabilitation and other fields, and developed electric ultrasound therapeutic apparatus, ultrasonic uterine rejuvenation apparatus and other products, aiming at obstetrics and gynaecology, gynaecology, reproductive department, family planning clinic and other departments, which is expected to provide a new driving force for the company's sustained and rapid growth in the future.
Profit Forecast and Investment rating
Reason for recommendation: in the short term, after the release of the epidemic, the company's business is expected to gradually return to normal, and the self-developed new magnetic stimulation products are expected to drive high performance growth; in the medium term, the company's traditional pelvic floor electrical stimulation and magnetic stimulation products are expected to maintain high growth. New products in the field of reproductive rehabilitation and sports rehabilitation, such as ultrasonic therapeutic apparatus, ultrasonic uterine rehabilitation apparatus, finger joint rehabilitation evaluation system, are expected to create a second growth curve. According to the data of the head Leopard Research Institute, the market size of China's postpartum rehabilitation equipment industry is expected to reach 14.48 billion yuan (calculated by terminal sales) in 2023, and the industry CAGR is expected to be about 30% in 2018-2023. The industry is in a period of rapid growth. Under the background of rapid growth of the industry, the company's traditional business is expected to maintain a high growth rate. In the long run, the penetration rate of the rehabilitation equipment industry is low, and the risk of collecting related products is relatively low. In recent years, the national level has issued intensive policies to promote the development of rehabilitation disciplines, such as "opinions on accelerating the Development of Rehabilitation Medical work", "notice on carrying out pilot work of Rehabilitation Medical Services" and so on, so as to promote the development of the industry. In the future, the company is expected to continue to increase market share by virtue of product power, channels, services and other advantages.
The volume of diagnosis and treatment in the rehabilitation equipment industry is expected to recover in 2023, assuming that driven by the release of new magnetic stimulation products, the company's traditional pelvic floor and postpartum rehabilitation equipment income will maintain a growth rate of 21%. Related consumable materials and accessories income maintained a growth rate of 22% (the recovery of diagnosis and treatment volume may lead to an increase in the use of consumable materials) If the revenue of other products (mainly ultrasonic therapeutic apparatus, ultrasonic uterine involution instrument, finger joint rehabilitation evaluation system and other new products) achieves about 100% growth, the company's overall revenue can achieve about 30% growth. It is estimated that the income from 2022 to 2024 will be 3.77,4.90 and 632 million yuan respectively, an increase of 10.28%, 30.00% and 29.00% over the same period last year. The net profit of homing was 1.23,1.62 and 210 million yuan respectively, up 3.93%, 31.49% and 29.59% over the same period last year. Cover for the first time, giving a "buy" rating.
Risk hint
1) intensified competition in the industry: at present, the competition in the traditional electrical stimulation business market is relatively fierce, and there is a price war, and the growth rate of the company's corresponding products will slow down in the future, which may even affect the overall gross profit margin of the company; the company's magnetic stimulation products still maintain high growth at present, but do not rule out the possibility that the industry competition will gradually intensify in the future.
2) the progress of research and development is not as expected: the strategic goal of the company is to gradually expand the products in the field of pelvic floor postpartum rehabilitation in the future. if the progress of new product research and development is not as expected, it will affect the timely listing of the company's follow-up products, which may reduce the iterative speed of product upgrading and lag the layout of new product research and development, thus affecting the competitiveness of the company in the industry.
3) the promotion of new products in the market is not as expected: at present, the reproductive and sports rehabilitation products launched by the company, such as uterine rehabilitation apparatus, ultrasound therapy instrument, finger joint rehabilitation evaluation system, etc., are all in the early stage of market promotion, if there are problems in product pricing, academic promotion, sales strategy and so on, the volume of new products may be lower than expected, which in turn will affect the future revenue growth of the company.
4) sensitivity analysis: there is a risk of price reduction in the company's traditional products. Assuming that the company's gross profit margin falls from 70.5% to 68.5% in 23 years, the company's overall net profit decreases from the current estimate of 162 million yuan to 153 million yuan.