Company profile: the leader of intelligent management of scarce medical materials. Elon Technology focuses on providing intelligent management services of medical materials for medical institutions at all levels, with three series of automatic pharmacy products, automatic ward products and automatic logistics products, covering in-hospital door / emergency pharmacy, intravenous drug dispensing center, out-of-hospital pharmacy, ward, logistics and other fields. The company's products have high brand awareness and reputation, so far it has covered more than 800 domestic medical and health institutions, including more than 400 third-class hospitals. The company's automated pharmacy products contribute more than 60% of the revenue and more than 70% of the gross profit, which is the company's core business segment. The static distribution center series products are in a period of rapid growth, with CAGR reaching 40.2% in 2016-2019, and the proportion of revenue in the company's automated pharmacy sector has increased from 14% to 24%.
Industry analysis: a growth track driven by endogenous demand and policy. Medical materials in hospitals rely on high-intensity manual processing for a long time, which is inefficient and prone to manual errors, and there is a strong endogenous demand for intelligent management of medical materials; documents to encourage and guide intelligent management of medical materials have been issued one after another to provide a good policy soil; the long-term growth of medical and health investment in China and provinces to speed up the construction of deficiency boards after the epidemic provide potential demand space for intelligent management of medical materials. At the end of 2018, the overall penetration rate of automation equipment in outpatient pharmacies in China was about 20.0%. We judge that the overall penetration rate of intelligent management of materials in China's medical industry is currently less than 10%, and there is much room for improvement in the future. It is conservatively assumed that the penetration rate of intelligent equipment in tertiary hospitals will increase by 2% every year, and the penetration rate of secondary hospitals will increase by 1% every year. Five years later, it will create a market space of 10 billion yuan. Driven by both endogenous demand and policy, the track is full of growth.
The comprehensive strength is strong, the operation turnover is steady. The service capacity of the company to undertake a large number of fully customized material management system projects is scarce. at present, the project amount of Nantong Medical Center and Kunshan Western Medical Center is close to 50 million yuan. By the end of 2018, the company's market share in the field of outpatient pharmacy automation was 28.5%, second only to Jianwei information, with a leading market position, and the brand effect gathered many new customers for customers. the perfect after-sales service network enhances the company's customer stickiness and ensures that the company excavates more value in a single customer, which is good for long-term development. In terms of operation, the company presents the characteristics of relatively high accounts receivable, which is caused by the long settlement process of customers, and the loss of bad debts is controllable. from 2016 to 2020, the cumulative net operating cash inflow is 224 million yuan, the cumulative net profit is 239 million yuan, and the operating cash flow is highly matched with the net profit.
Pay attention to R & D investment, technology and talents to build a moat. The intelligent management industry of medical materials has the characteristics of talent-intensive and technology-intensive, and the leading level of technology can build a moat of the company. Since its establishment, the company has always paid attention to R & D investment. In 2020, R & D expenditure was 32.24 million yuan, the R & D expenditure rate reached 10.40%, and R & D personnel accounted for 21% of the total number of employees. Relying on the perfect training system and competitive salary in the market, the company has trained a group of experienced technical and business personnel. Mr. Jiao Xiaobin, a core technician, has worked in Beijing Beida Fangzheng Electronics Co., Ltd., with many years of research and product development experience in the field of computer vision. The company relies on the industry's leading technical level and talent advantages to build a moat.
Profit forecast and investment advice: we expect the operating income of Elon Technology from 2021 to 2023 to be 408 million, 545 million and 726 million respectively, the return net profit to be 94 million, 122 million and 162 million respectively, and the basic earnings per share to be 1.22,1.58 and 2.10 yuan, respectively, and the corresponding PE are 27.9X, 21.4X and 16.2x, respectively. no, no, no.
The industry of intelligent management system for medical materials is in the growth stage, and the market saturation is low, so it is a blue sea track with full potential. Elon Technology, as an industry leader, has the core barriers of technology and talent, and has scarce customized service capability. be able to respond quickly to market demand, cover for the first time, and give a buy rating.
Risk tips: product and technological innovation research and development risk, industry competition risk, brain drain risk, market space measurement deviation risk, the use of public information lag or not updated in a timely manner.
