新华医疗(600587):打出组合拳 迎接“十四五”新发展

Xinhua Healthcare (600587): Play a combo to welcome new developments in the “14th Five-Year Plan”

光大證券 ·  12/31/2021

Incident: On the evening of December 30, Xinhua Medical announced that the company plans to raise no more than 1,284 billion yuan for intelligent manufacturing and supporting projects based on flexible processing lines, high-end precision minimally invasive surgical instrument production and expansion projects, etc.; the company plans to acquire 40% of the subsidiary Xinhua Surgical Instruments for 48,195 million yuan; the company plans to invest 49 million yuan to establish a high-tech medical equipment company with various parties.


The company issued a plan for a non-public offering of shares. The company plans to raise no more than 1,284 million yuan, not more than 30% of the original total share capital. It is used for intelligent manufacturing and supporting projects based on flexible processing lines, high-end precision minimally invasive surgical instrument production expansion projects, etc. The number of shares subscribed by Shandong Health, the controlling shareholder of the company, will not be less than 28.77% of the total number of shares issued this time. The company's fixed increase this time is mainly to meet market development needs, upgrade the product structure, and continue to maintain the company's leading position in the industry. The 2021 “14th Five-Year Plan” clearly proposed “breaking through the core technology of high-end medical equipment”, and the medical device industry ushered in a golden period of development. According to the “2018 Global Medical Device Market Overview and 2024 Outlook”, the global medical device sales volume in 2017 was 405 billion US dollars. From 2017 to 2024, the compound annual growth rate of the global medical device market is expected to be about 5.6%, and global medical device sales are expected to reach 594.5 billion US dollars in 2024.

The company plans to acquire 40% of the shares of Xinhua Surgical Instruments Co., Ltd. It is proposed to spend 48,195 million yuan. The main business of Xinhua Surgical Instruments is the manufacture and sale of non-medical device products such as medical instruments, dental technical instruments, laboratory metal clips, bed beam flexible shaft holders, adapters, J-arms, etc.; sales of sterilization packaging products, consumables, and disinfection products. Currently, Xinhua Healthcare holds 60% of the shares, and the German Snake brand holds 40% of the shares. After this acquisition is completed, Xinhua Surgical Devices will become a wholly-owned subsidiary of Xinhua Medical, which can focus on the development of the company's main business, give full play to its brand advantages, and achieve collaborative development with the parent company, Xinhua Healthcare's business.

The company plans to jointly invest with various parties to establish a subsidiary high-tech medical device company. The registered capital is 100 million yuan, of which Xinhua Medical plans to invest 49 million yuan, with a shareholding ratio of 49%, as the largest shareholder. The main purpose of establishing a high-tech medical device company is to implement the new and old kinetic energy conversion policy, with government guidance and market-based operation, focusing on the four key medical device industry segments of precision radiotherapy and imaging equipment, intelligent sensory control and epidemic prevention equipment, in vitro diagnostic instruments and reagents, and intelligent operating room equipment, to establish a collaborative innovation mechanism in the industrial chain, and integrate strategic next-generation technologies such as AI and the Internet to form an innovation paradigm that places equal emphasis on leading innovation, disruptive innovation, original innovation and follow-up innovation, adaptive innovation and integrated innovation.

Profit forecasting, valuation and rating: As a leader in sensor control equipment and pharmaceutical equipment, the company has a sound product system and integrated solution capabilities, and is expected to fully enjoy the dividends of new medical infrastructure and the rapid development of the pharmaceutical equipment industry. We maintain our forecast that the company's EPS from 2021 to 2023 will be 1.39/1.73/2.12 yuan, and the current price corresponding to PE will be 22/18/14 times, maintaining the “buy” rating.

Risk warning: The company's orders fell short of expectations, industry risks increased, and the increase in capital raised fell short of expectations.

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