The current situation of the company

Meiya held the launch of its Digital Oral system solution 2.0 on the evening of June 16, and we believe that the company's intraoral scanners will meet the market faster than expected, relying on the advantages of equipment and software in the future. the company is expected to fully benefit from the development of oral digitization.

Comment

The press conference showed Meiya's intraoral scanner Myscan to the market for the first time, and the launch time of the product is expected to exceed market expectations. The market pays more attention to Meiya's new product oral scanner, and it was expected that there would be a higher probability of forensics listing in the second half of this year. Although the company has not yet formally obtained evidence, the product release time is earlier than market expectations. We expect the intraoral scanner to collect evidence in the near future and begin to launch into the market in the third quarter. The company's intraoral scanner has been polished for a long time, and the feedback from downstream use is also more positive. considering that intraoral scanner and CBCT are the same channel with customers, we think that in the future, intraoral scanner is expected to become the next blockbuster product of Meiya, which is equivalent to another Meiya medical plate.

The digital scheme will optimize the existing diagnosis and treatment model and enhance the user experience. Digital solutions include: 1) CBCT;2) Intraoral scanner, 3) CAD software, 4) chair side cutting repair system, etc. In the future, doctors will collect the anatomical data of patients' mouth through CT, collect the surface data of teeth through oral scan, complete the design work through CAD software, complete the production work through the chair repair system, and support advanced software to assist diagnosis and treatment and enhance patient experience.

There are many application scenarios of intraoral scanner, which can fully improve the patient experience. We conclude that the main uses of the intraoral scanner include: 1) digital intraoral repair, including removable dentures and fixed dentures; 2) implants, such as the design and manufacture of implant guides; 3) orthodontics, digital oral correction and recessive correction; 4) optimize doctor-patient communication and intuitively display the effect.

Release high-end oral CBCT to enhance the competitiveness of products. The conference also unveiled a new generation of oral CT, which is equipped with an AI imaging system that optimizes images (intelligent panorama, intelligent noise reduction and intelligent artifact removal) and makes the operating software more intelligent. The company's product strength continues to upgrade, and will develop towards informationization, digitalization and intelligence in the future.

We expect domestic demand for color sorters to recover rapidly since the second quarter, but export and CT demand are still affected by the epidemic. Considering that the downstream of the color sorter is mainly agricultural products, and the demand is relatively rigid, we expect that the domestic demand for color sorter has recovered in the second quarter. However, taking into account the impact of the epidemic on logistics, we estimate that there is pressure on exports, but this is not the disappearance of demand, and we expect delayed demand to be released at a later stage. Considering that the oral diagnosis and treatment scene is easy to spread the virus, the resumption of oral clinics is generally slow. Although CT's group purchase orders continue to grow rapidly, we estimate that shipments from April to May are still slow, but we expect equipment shipments to accelerate in June, and we maintain our sales forecast of 2500 units for the whole year.

Valuation proposal

For the time being, we maintain the profit forecast of RMB 650 million / RMB 770 million (this forecast does not take into account the sales of new products). The current share price corresponds to the 50.5x/42.8x of 2020max 21e. Considering that the launch time of the company's new product is expected to exceed expectations, we raise the target price by 20% to RMB 57.9, which corresponds to a potential increase of 18.7% for 60x2020e PPUE, maintaining an industry rating that outperforms.