The growth rate of the profit end has been lower than that of the revenue side in the past three years, and the gradual expansion of new products has opened a new chapter for the company. From 2018 to 2020, the company's revenue and year-on-year growth rate were 3.65 (+ 20.46%), 4.41 (+ 21.00%) and 490 million yuan (+ 10.90%), respectively, and the home net profit and year-on-year growth rate were 1.42 (+ 11.73%), 1.57 (+ 10.82%) and 121 million yuan (- 23.22%), respectively.
In recent years, the company's profit growth is lower than the revenue end, we believe that mainly because the company methylation and autoimmunity and other new varieties into the clinical registration stage, marketing costs and clinical expenses lead to a decrease in net profit. The company's Q1 revenue in 2021 was 119 million yuan (310.20% in 2020 and 75.73% in 2019), and its net profit was 23 million yuan (220.62% in 2020 and 46.20% in 2019). We judge that the reason for the high growth is that the impact of the epidemic has subsided, and it is expected that the company will gradually expand its new products in the future, and the company will enter a new stage of rapid development.
The company's valuation matches the performance, and the medium-and long-term performance growth has a high degree of certainty. The company's market capitalization has less than doubled in the five years since it went public, and its valuation is lower than the industry's average. We believe that, with the recovery and development of performance, the company has some room for valuation improvement. With the domestic epidemic situation under control, we believe that the performance of the company's original main business (such as swollen mark testing, HPV testing, etc.) will recover rapidly, and the new products will gradually begin to scale up with the progress of promotion. The driving force of future performance growth mainly comes from the following three aspects:
1. We expect the original main business swelling standard and HPV to resume steady growth of 20% and 30%. There are 20 kinds of swelling mark testing products when the company is listed, 15, 14, 8 and 10 kinds of foreign IVD giants Roche, Abbott, Beckman and Siemens respectively, and 12, 18 and 15 kinds of domestic IVD enterprises Mindray, new industry and Antu respectively. In terms of product reserve, the company has outstanding advantages, and domestic replacement can be expected in the future. The company uses flow fluorescence technology and fluorescence quantitative PCR technology to develop a series of HPV testing products, which can detect 27 subtypes or "5x9" single type detection at one time, and the HPV service covers a comprehensive range. At present, the company's income mainly comes from the reagent income, and the reagent income mainly depends on the installed capacity of the instrument. The 2020 annual report revealed that during the reporting period, the company completed the installation of 651 instruments of all kinds, and the company covered more than 1100 terminal customers, of which tertiary hospitals accounted for 73.68% of hospital customers. At the same time, the company will launch the overseas market layout of luminous products in 2021 and open the international market with the company's i100 elf luminometer. We expect that the increase in instrument installation and terminal coverage and the expansion of overseas markets will bring considerable reagent revenue to the company's original main business.
two。 The volume of new products is expected to improve.
The main results are as follows: 1) the autoimmune products have outstanding technical advantages and are expected to realize domestic substitution. According to Hao Oobo's prospectus, the punctuation information report shows that the size of the domestic self-immunity testing market in 2020 is estimated to be about 1.56 billion yuan, and is expected to grow at an annual growth rate of 14%. At present, the market is about 80% share by European and American enterprises. we believe that the industry is developing rapidly and there are domestic substitution opportunities. At present, the mainstream methodology in this field in China is still manual detection and single index detection, and the results take a long time.
The company's sixteen autoantibody spectrum detection kits (flow fluorescence luminescence method) can detect 16 autoantibodies at a time, and the detection speed is much higher than that of similar domestic products. while realizing quantitative and automatic detection, it also has the advantage of joint detection and high speed, and the time from hospital sampling to reporting is reduced to 2 hours. In addition, for the case of single index detection, the company's products use chemiluminescence technology platform to make up for the shortcomings of flow fluorescence technology, with the advantages of high sensitivity, strong specificity, wide linear range and high degree of automation. the company's dual platform combination can cover almost all immune detection projects, and different platforms have their own advantages in different application scenarios. We believe that the company has strong technical advantages, and the related products of the follow-up company are expected to seize the alternative opportunity to achieve volume.
2) the development prospect in the field of molecular diagnosis is good, and the dose still needs time. The lung cancer gene methylation detection product introduced by the company adopts double index detection (SHOX2, RASSF1A double gene methylation), which greatly improves the diagnostic effectiveness of lung cancer. As a powerful supplement to traditional cytological methods, it has a good development prospect in improving the sensitivity and specificity of lung cancer and colorectal cancer detection. However, as the product needs to complete the price declaration in the process of entering the hospital and the marketing needs more time, as of the first half of 2020, the company has obtained the methylation price record of lung cancer in 5 provinces and cities. We believe that the subsequent release of the product still needs to wait for the product to enter the hospital and be approved by the doctor.
3. The company increases its marketing efforts, and the equity incentive plan demonstrates the company's long-term development ambition. 1) continue to expand the size of the marketing team: the number has doubled from 2019 to 2020, 140 in 2020, and is expected to exceed 200 by the end of 2021. 2) on the basis of regional management, product line management is added to strengthen the promotion of new products: the original regional management policy makes marketers more inclined to promote old products with existing market base. after sub-line management, the assessment index for the promotion of new products is relatively more stringent. 3) targeted incentive to front-line marketing managers through equity incentive policy: the company granted 1.73 million stock options and 380000 restricted shares to 35 incentive targets in January 2021. This equity incentive is mainly aimed at the person in charge of the marketing area and the person in charge of the product line. The trigger value of net profit deducted from 2021 to 2024 is 205 million yuan, 246 million yuan, 296 million yuan and 355 million yuan, respectively. The target values are 242 million yuan, 313 million yuan, 406 million yuan and 527 million yuan respectively, an increase of 70%, 120%, 185% and 270% respectively compared with 2019. Equity incentive policy shows that the company attaches importance to marketing work, but also highlights the company's long-term development ambition.
Profit forecast and investment advice. It is estimated that the net profit of homing from 2021 to 2023 will be 2900.379 million yuan respectively, with a year-on-year growth rate of + 85.0%, + 29.9% and + 30.8% respectively.
The corresponding EPS is 2.45,3.18,4.16 yuan respectively. With reference to comparable companies, we give the company a reasonable value range of 68.55-80.79 yuan corresponding to 28-33 times PE, in 2021, maintaining a "better than the market" rating.
Risk tips: (1) intensified market competition. (2) the promotion of high-throughput technology is not up to expectations.