Brief description of the incident
On March 30, 2023, the company released its 2022 annual report. In 2022, the company achieved revenue of 2,491 million yuan, -7% year on year; achieved net profit of 890 million yuan, -26% year on year; achieved net profit of 822 million yuan after deducting non-return to the mother, -28% year on year; on a quarterly basis, 202204 achieved revenue of 466 million yuan, -48% year on year, and net profit of Fumo was 160 million yuan, compared with -99% of the same day, after deducting net profit of non-return mother, and -99% of the company also released Jianfan Biotech's Striver 1 employee stock ownership plan (draft) on the same day, to be funded by employees themselves No more than 150 million dollars were raised for shareholding plans in the form of a 1:1 ratio of capital to corporate incentive funds.
Management analysis
Revenue from nephrology and hepatology products declined, and blood purification equipment expanded rapidly. The company achieved annual revenue of 2,025 million yuan for blood perfusion devices, -13% year on year; plasma bilirubin adsorbers achieved revenue of 115 million yuan, -26% year on year. Affected by factors such as the domestic epidemic, nephrology and hepatology-related products have declined to a certain extent. However, critical care products performed well, achieving domestic revenue of 229 million yuan, +32% over the same period last year. At the same time, blood purification equipment achieved revenue of 198 million yuan, +163% over the same period last year, and installed sales of equipment products such as DX-10 achieved rapid growth.
The overall cost rate has increased significantly, and R&D grants have increased rapidly. The company's overall annual cost rate has increased significantly, with R&D investment of 254 million yuan, +46% over the same period last year. The main construction of the Jianfan Science Building invested by the company has now been renovated and is expected to be put into use in 2023. The 2022 hemodialyzer, three different formulations of dialysis powder, and citric acid disinfectant products were successfully certified, which will more comprehensively meet diverse hemodialysis treatment needs.
The new employee stock ownership plan was released, and the assessment indicators focus on long-term performance. The performance assessment years for the employee stock ownership plan are the five fiscal years 2023-2027. The two vesting period indicators are: 1) 2023-2025 cumulative net profit reached 3.6 billion yuan; 2) 2023-2027 cumulative net profit reached 7 billion yuan, which shows that the company pays attention to long-term business performance and fully mobilizes the enthusiasm of core key employees.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the company's competitiveness in the field of blood purification. It is estimated that the company's net profit in 2023-2025 will be 11.13, 13.52, and 1,637 billion yuan respectively, up 25%, 21%, and 21% over the previous year. EPS will be 1.38, 1.67, and 2.03 yuan respectively. The current price corresponding to PE is 22, 18, and 15 times, maintaining the “buy” rating.
Risk warning
Health insurance fee control policy risks; risk of new product development falling short of expectations; risk of product promotion not meeting expectations; risk of capacity construction and use falling short of expectations.