Main points of interest
Invisible orthodontic industry leader: time Angel is the first company in China to provide invisible orthodontic services. according to cauterization consulting data, by the end of 2020, the company's market share in invisible orthodontics was 41.0%, making it the leader in the industry. The company is highly profitable, with gross profit margin and adjusted net profit margin reaching 70.4% and 27.8% respectively in 2020. The management team has rich experience in the field of stomatology, and the actual controller pine and cypress investment can bring relevant resources to the company to help its business development.
The growth space of invisible orthodontics industry is broad: the growth rate of invisible orthodontics is prominent in recent years because of its many advantages over traditional orthodontics. Compared with the United States, which is more developed in stealth orthodontics, the stealth orthodontic market in China is at a low level in terms of orthodontic treatment rate, invisible orthodontic penetration and the number of doctors. in the future, with the increase of income, the enhancement of people's awareness of oral health care and the development of stealth orthodontic technology, the invisible orthodontic market in China has a broad growth space. In the era of invisible orthodontic market in China, Angel and Invisible Beauty are dominant, and they have accumulated a large number of cases in China. A large number of cases can help improve the quality of the database, thus making the product treatment accuracy higher, deepening the company's moat. Time Angel's better process data can continue to strengthen its database quality and maintain its competitive advantage.
The core competitive advantage is outstanding: the advantages of the three aspects of time Angel can help it stabilize its leading position and go further: 1) multiple product matrix: the company's four invisible appliance products can achieve full indication coverage, full age band coverage and full price band coverage. coupled with its targeted product pricing strategy, it can help the company quickly seize market share. 2) strong terminal driving force: professional medical design team can enable doctors to master technology faster and help cover more general dentists. In addition, the terminal profit margin of the company's products is large, which jointly contributes to the continuous development of the company's business. 3) time Angel 2B holds various academic and R & D activities to strengthen ties with doctors, 2C cooperates with the training Bureau of the State General Administration of Sports, and continues to invest in advertising on social platforms for consumer education, which can establish a good brand image and strengthen the company's moat construction.
Investment advice: we predict that under the absolute / relative valuation method, the reasonable valuation of time Angel is HK $557 / HK $52.1 billion respectively. Considering the competitive situation of the industry, the company's operating advantages and valuation, we give the time Angel a "buy-A" rating.
Risk tips: orthodontic treatment rate and invisible orthodontic penetration rate is lower than expected; hidden beauty price competition; competitors' technological innovation breakthroughs; sinking market expansion is not as expected; medical design-related brain drain and so on.