Events:

On August 24, the company released its mid-2022 report that its operating income in the first half of 2022 was 274 million yuan, an increase of 36.98 percent over the same period last year. The net profit of returning to its mother was 99.6676 million yuan, an increase of 62.64 percent over the same period last year. The net profit of deducting non-returning mothers was 90.9419 million yuan, an increase of 59.06 percent over the same period last year. In 2022, the operating income of Q2 in a single quarter was 133 million yuan, an increase of 34.41% over the same period last year, and the net profit returned to its mother was 60.3432 million yuan, an increase of 148.11% over the same period last year.

Comments:

The main business has developed strongly, and the cooperation among core customers has been accelerated.

In the first half of 2022, the company achieved a business income of 274 million yuan, with strong development strength. According to the type of product business, 1) the operating income of syringe products reached 174 million yuan, an increase of 85.97% over the same period last year. 2) the business income of puncture needle products reached 71.8592 million yuan, an increase of 66.55% over the same period last year. Divided by application areas, ① medical sector, the company's products sold to Europe and the United States are mainly disposable sterile syringes, nutrition feeding syringes and other conventional products, as well as safe insulin syringes and other high value-added products, the market demand is expected to achieve steady growth in the future. ② animal plate has a broad space for development, the company's veterinary products "can be found veterinary needle", "disposable aluminum-plastic inlaid needle", "veterinary sheath syringe" have strong market competitiveness; ③ laboratory consumables plate, the company has established stable cooperative relations with customers in many countries and regions mainly in Europe and the United States.

The rate of each expense has been continuously optimized, and the expansion of production capacity has been promoted steadily.

In the first half of 2022, the company's sales expense rate was 0.67%, down 2.17% from the same period last year, and the management expense rate was 5.26%, an increase of 0.64% over the same period last year. Due to the increase in various activity expenses and business hospitality expenses incurred during the listing process, the financial expense rate was-5.87%, down 6.20% from the same period last year, which was due to the increase in exchange income and deposit interest income. The company now has more than 68000 square meters of production workshop, including more than 40,000 square meters of 100, 000-grade purification workshop in line with the GMP standard. At the same time, the construction of the second phase of the plant project is being carried out in an orderly manner, and the company's capacity is expected to be further expanded.

The investment in R & D continues to grow, and the approval of registration certificates at home and abroad is smooth.

In the first half of 2022, the company's R & D expenditure rate reached 3.57%, and the input cost increased by 8.16% compared with the same period last year. As of June 30, 2022, the company has obtained FDA 510K registration for 23 of its own products, which is a leading position in the same industry. 28 products have obtained CE certification, 6 first-class domestic medical device registration certificates, 4 domestic medical device registration certificates, 91 domestic patents and 3 overseas patents. At the same time, the company's product quality management system is in line with international standards, with ISO13485, ISO11135, MDSAP and other certifications.

Profit forecast: we expect the company's operating income from 2022 to 2024 to be 679 million yuan 10.34 / 1.529 billion yuan, respectively, and the net profit to return to the mother is 1.99 million yuan 305 million yuan, maintaining the "buy" rating.

Risk tips: fund-raising project implementation risk, raw material price fluctuation risk, core technology brain drain risk, customer concentration risk, product quality control risk.