Key points of investment
Event: On the evening of April 3, 2023, the company released its 2022 annual report.
Revenue in 2022 increased by about 32% year on year, and Guimu's net profit increased by about 25% year on year 2022 as a whole: the company achieved revenue of about 374 million yuan, an increase of 32% over the previous year, and achieved net profit of about 80 million yuan, an increase of about 25% over the previous year.
2022Q4: The company achieved revenue of about 140 million yuan, an increase of about 39% over the previous year, an increase of about 59% over the previous month, and achieved net profit of about 32 million yuan to the mother, an increase of about 53% over the previous year, and an increase of about 103% over the previous month.
The gross profit margin and net interest rate declined by about 9.29 and 1.12 pct respectively in 2022, and profitability in 2023 is expected to repair the company's gross profit margin and net interest rate of about 53% and 21% respectively in 2022. The decline in gross margin was mainly due to 1) product restructuring; 2) the rise in upstream plastic, steel and other raw material prices in 2022. The decline in net interest rate was far lower than the decline in gross margin, mainly due to the significant increase in the company's ability to manage expenses during the period. The cost rate for the company period in 2022 was about 35%, down about 4.5 pct from the previous year. Among them, sales, management (excluding R&D), finance, and R&D expenses were 11.5%, 9%, -2.4%, and 17%, respectively, down about 2.3, -0.1, 0.1, and 2.2 pct, respectively. The increase in the management fee rate is mainly due to equity incentive calculation. The company spent about 64 million yuan on R&D in 2022, an increase of 16% over the previous year.
The revenue of the isolation series products in 2022 increased by about 87% year on year. Looking at the segment, the company's microbial detection series, isolation technology series, sterilization technology series, and organic matter analysis technology series products accounted for about 31%, 47%, 9%, and 5% of total revenue in 2022, respectively. The share of isolation technology series products increased significantly by about 13.7 pct. The share of microbiological testing, sterilization, and organic matter analysis series declined 2.5, 6.2, and 2.3 pct, respectively, compared to 2021. The isolation technology series products maintained a high growth trend, with revenue of about 175 million yuan in 2022, an increase of about 87% over the previous year. As of the end of 2022, the contract debt was about 72 million yuan, and we expect the isolation technology series to continue to increase in 2023.
2022 Equity Incentive Goals Successfully Completed
According to the company's April 2022 equity incentive draft, the company's net profit targets for 2022-2024 are no less than 0.9, 115, and 140 million yuan respectively, and the 2021-2024 performance CAGR is about 30%. The company expects to pay equity incentive expenses of about 1,363, 1649, 806, and 2.31 million yuan respectively in 2022-2025. According to this estimate, the company's equity incentive target for 2022 has been successfully completed.
Profit forecasting and valuation
The company's net profit is expected to be 101, 1.37, and 176 million yuan respectively in 2023-2025, up 26.2%, 35.8%, and 28.9% year-on-year. The closing price on April 4, 2023 corresponds to PE 35.3, 26, and 20.2 times that of 2023-2025, maintaining the “buy” rating.
Risk warning
Demand for downstream applications fell short of expectations; production expansion progress fell short of expectations, etc.