Core ideas:
The medical service industry has great potential for development. "2030 healthy China" strategy and "continue to deepen reform"
The general direction brings opportunities for the development of the medical service industry. In the past few years, the income of private hospitals has maintained a growth rate of more than 20%, and there is great potential for the growth of income scale and operating efficiency. HCA, an American medical service company, plays an exemplary role, and its business is growing rapidly, and the market capitalization of HCA has grown rapidly in the past 10 years.
Major shareholder China Resources Group is one of the six health care reform institutions designated by the state. China Resources Medical is the group's main platform in the field of health care, with 106 medical institutions and rich experience in hospital management. In 1619, the overall hospital income grew by 5.6% (excluding Yan Chemical Company, the endogenous compound growth rate was 8.5%), and the profit contribution compound growth rate was 13.4% (excluding Yan Chemical Company, the endogenous compound growth rate was 23.8%; the hospital profit contribution came from the performance meeting materials). In 2019, the overall hospital income was 6.87 billion yuan, and the profit contribution was 715 million yuan. Excluding the influence of Yanhua, it increased by 17.7% and 21.0% respectively compared with the same period last year. Business has resumed since June 20 after the epidemic.
Double drive of endogenesis and extension, enlarge the comprehensive medical group, and promote the landing of specialist strategy. Continue to improve the operation of acquired hospitals, achieve synergy, and the overall profit contribution of its hospitals continues to improve.
Looking for high-quality targets, give priority to secondary and tertiary hospitals with leading market share and high attendance; major shareholders reserve nearly 13000 beds. Gradually promote the landing of the specialist strategy, focusing on promoting the development of the brain Hospital Group, covering Guangdong and Guangdong on the basis of Sanjiu brain Department, and invigorating the brain specialist resources of China Resources Medical Dawan area through investment, mergers and acquisitions and the integration of relevant specialties.
Give a "buy" rating for the first time. It is estimated that the net profit will be 465 million yuan and 530 million yuan respectively, and the latest closing price will be 15 times and 13 times of PE respectively. China Resources Group is one of the six state-designated health care reform institutions. China Resources Medical is the group's main platform in the field of health care, with rich experience in hospital management and dual-drive growth through endogenous and continuous mergers and acquisitions. With reference to the valuation of the comparable company, a 21-year valuation of 20 times PE is given, corresponding to a reasonable value of HK $8.61 per share.
Risk hint. The epidemic has an adverse impact on offline hospitals; the expansion process is not as expected; the rapid development of Internet medical care has an impact on physical hospitals.