Event

On October 25, 2022, the company released the three-quarter report of 2022, with revenue of 377 million yuan in the first three quarters, an increase of 22.42% over the same period last year, and a net profit of 134 million yuan, an increase of 47.79% over the same period last year, deducting 123 million yuan of non-return net profit, an increase of 41.92% over the same period last year. In the third quarter, the operating income was 103 million yuan, down 4.53% from the same period last year; the net profit returned to the mother was 34.48 million yuan, up 16.92% from the same period last year; and the net profit from non-return to home was 31.75 million yuan, up 8.47% from the same period last year. The net cash flow generated by operating activities in the first three quarters of 2022 was 103 million yuan, an increase of 10.49% over the same period last year.

Comment

The rate of each expense is continuously optimized, and the development trend continues to improve.

In the first three quarters of 2022, the company's gross profit margin was 41.97%, down 3.34 pct from the same period last year; the sales expense rate was 0.66%, down 1.91pct from the same period last year, mainly due to the adjustment of the current period of transportation and miscellaneous charges to operating costs according to the new income criteria; and the management expense rate was 5.62%, an increase of 0.97pct over the same period last year, mainly due to the increase in the expenses of various activities and business hospitality incurred during the listing process of the company. The financial expense rate is-6.82%, which is mainly due to the increase in interest income from the current deposit; the R & D expense rate is 3.94%, which is lower than the same period last year (0.34pct).

A number of new patents, certification and registration have been added, and R & D investment has been continuously increased.

The rate of R & D expenditure per quarter in the third quarter of 2022 was 4.93%, an increase of 1.08cpt over the same period last year. On September 1, 2022, the subsidiary adopted two new patent certificates for utility models, and on September 19, the company's OTC nutrition interface syringe products passed the examination and approval of FDA in the United States. On September 19, Adoption shares obtained two new patent certificates for utility models. By the end of September 2022, the company has 95 domestic patents and 3 overseas patents. At the same time, 24 of its own products have obtained FDA 510K registration and 28 EU CE certification, leading the industry. In the first half of the year, 510K product registrations such as pre-filled catheter washers and disposable pump syringes were added, while more than ten patents were added in the first half of the year.

The growth of R & D investment and product registration further enhance the company's core competitiveness.

The production capacity is built smoothly, the product registration is smooth, and the power for development is accumulated.

In terms of production capacity, the company actively promotes the construction and commissioning of the second phase of the plant in Walsh Town, and plans to build a new factory according to the product layout in the future to adapt to the production capacity plan. In terms of market and customers, the company has cooperated with Neogen and Thermo Fisher since 2006 and has gradually accumulated international medical giants such as Medline, McKesson and GBUK, and maintained a stable cooperative relationship. The company is expected to enhance the sales scale of existing customers and actively expand new customers through new product research and development and mass production.

Profit forecast: considering the impact of the situation at home and abroad and the epidemic situation on the company's performance, the operating income forecast for 2022-2024 is reduced from 679, 1034, 000.

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