Key points of investment
Recently, Wandong Medical released its 2020 annual report. During the reporting period, the company achieved operating income of 1,132 million yuan, an increase of 15.22% over the previous year; achieved net profit of 221 million yuan, an increase of 30.66% over the previous year; and achieved net profit of 226 million yuan after deducting non-return mother's net profit, an increase of 52.25% over the previous year. Basic earnings per share were achieved of 0.412 yuan, an increase of 32.9% over the previous year. It is proposed to distribute a cash dividend of $1.30 (tax included) for every 10 shares. At the same time, the company released its 2021 quarterly report. During the reporting period, the company achieved operating income of 240 million yuan, a year-on-year decrease of 4.03%; realized net profit of 48.9967 million yuan, a decrease of 3.36% over the previous year; realized net profit of 46.5183 million yuan after deducting non-return to the mother, a decrease of 2.59% over the previous year; and basic earnings per share of 0.091 yuan, a decrease of 3.19% over the previous year.
Profit prediction and rating: The company's product line continues to be upgraded, and the proportion of high-end products continues to increase; through relevant investment in online remote reading centers and offline physical imaging centers, the company's transformation from equipment manufacturer to service provider is clear and is also in line with relevant policy guidelines; we are optimistic about the company's future growth in the long term. We adjusted our profit forecast for the company. It is estimated that the company's EPS for 2021-2023 will be 0.35, 0.41, and 0.47 yuan respectively, and that the corresponding PE for the stock price on April 29, 2021 will be 36X, 31X, and 26X respectively, maintaining the “prudent increase in holdings” rating.
Risk warning: product sales are lower than expected, new product development progress is slower than expected, new model expansion is lower than expected, and internal integration is lower than expected