Main points of investment
Event: 2021Q1 achieved an operating income of 60.99 million yuan, an increase of 199.5% over the same period last year; the net profit was 13.34 million yuan, and the net profit was 13.28 million yuan, which was in line with our expectations.
Q1 sales increased significantly, and the expense rate decreased significantly during the period: 2020Q1 was affected by COVID-19 's epidemic situation, and the demand for testing reagents in hospitals and testing institutions decreased, resulting in a great impact on the company's product sales. In 2021, with the relief of the domestic epidemic situation and the recovery of hospital outpatient clinics, the company's sales have achieved rapid growth. We expect the sales revenue of allergy testing products to grow by more than 200%, and the sales of autoimmune testing products to grow by more than 180%. In view of the relief of the domestic epidemic situation and the vaccination protection, the company expects the business situation to further improve in the second quarter, and the net profit of 2021H1 is expected to increase significantly. The sales expense of 2021Q1 Company is 13.85 million yuan (- 8.5%), and the sales expense rate is 22.72% (- 27.37pp), which is mainly due to the reduction of marketing influenced by COVID-19; the management cost is 7.03 million yuan (+ 88.2%), the management expense rate is 11.53% (- 6.82pp); the R & D cost is 6.51 million yuan (+ 19.3%), and the R & D expense rate is 10.67% (- 16.11pp).
The competitiveness in the field of allergy is outstanding, and quantitative testing further strengthens the company's leading position: as the leader of domestic allergy testing (with a market share of 30%), the company's income CAGR reached 27.5% in 2016-2019. Affected by the epidemic in 2020, income decreased by 23%, among which quantitative reagents increased by more than 50%. Quantitative testing is a significant trend instead of qualitative testing. By the end of 2020, the company has registered 13 new IgE allergens and 25 allergens under study, including allergens that have obtained registration certificates for sale and allergens under registration and research and development, covering 94 allergens, including registered and under research projects. Allergen single point testing and combined testing items will cover 111allergy testing items. The continuous increase in the number of allergens will continue to consolidate the company's leading position in the industry. In addition, the company's allergic chemiluminescence products are in the registration stage and are expected to become a new growth point for the company's profits in the future.
Auto-immunity business is growing against the trend, and chemiluminescence accelerates the company's import substitution: in 2020, the company has increased 16 auto-immunity projects under research. As one of the few domestic enterprises that apply luminous technology to the field of autoimmunity, luminous products are significantly ahead of the current mainstream qualitative products in the market, and are expected to continue to achieve import substitution in the future. At the same time, the company and Mindray Medical reached a cooperation agreement, the future is expected to rely on Mindray's strong brand influence and sales channels to further accelerate the volume of reagents.
Profit forecast and investment rating: we maintain the forecast of 2021-2023 net profit of 1.13 billion yuan. The current market capitalization corresponds to 42 times, 31 times and 23 times PE from 2021 to 2023, respectively, maintaining the "buy" rating.
Risk hint: the risk of intensified market competition; the risk that product research and development is not as expected.