Internal and external factors affected the company's performance. We are optimistic that the post-epidemic recovery company will achieve revenue of 2.49 billion yuan (yoy -6.9%) in '22 and net profit of 890 million yuan (yoy -25.7%). The performance fell short of our expectations (estimated revenue yoy +35.7%, and Guimo's net profit yoy +36.2%), mainly due to the impact of the epidemic on routine diagnosis and treatment superposition companies to increase their marketing management model adjustments.
The company's gross margin for 22 was 82.3% (yoy-2.7pct). We speculate that the increase in revenue from relatively low profit products such as blood purification equipment and dialysis powder was compounded by the price increase of raw materials. Considering the continuation of the company's marketing reforms and a certain cycle of new product releases, we adjusted the EPS for 23-25 to 1.32/1.59/1.89 yuan (previous value of 2.75/3.75 before 23/24). The company is a leader in the domestic hemoperfusion field. It has excellent technology and a comprehensive product layout. It gave a 28x PE valuation in '23 (comparable to the company Wind's average expectations of 25x), corresponding target price of 37.04 yuan (previous value of 56.67 yuan), maintaining the “buy” rating.
The epidemic affected the promotion of core products in hospitals, and I am optimistic that they will return to a rapid growth trajectory in '23 1) The company's blood perfuser is the company's core product, with revenue of 2.03 billion yuan in '22 (YOY -12.7%, mainly affecting routine medical treatment due to the epidemic). By the end of '22, the company's nephrology products had covered more than 6,000 hospitals of grade II and above in China. With the continuous promotion of new products (the revenue of new-standard nephrology products in 22 years yoy +106.2%), the continuous enrichment of evidence-based evidence (the HA130 multi-center RCT paper and the expert consensus on Jianfan HA blood perfusion devices have all been officially published), and the recovery of routine diagnosis and treatment after the epidemic, we are optimistic that sector revenue will achieve restorative growth in 23; 2) the company's bilirubin adsorber products earned 115 million yuan (YOY -26.2% in 22, mainly due to the impact of the epidemic on routine diagnosis and treatment). Considering that the company's academic promotion is progressing in an orderly manner and that there is plenty of room to increase the penetration rate of superposition therapy, we expect its revenue to return to relatively rapid growth in '23.
Continued enrichment of business areas and continued to contribute to increased performance
Combining the characteristics of existing products, the company continues to develop product layout in the fields of diseases such as critical illness, poisoning, self-immunity, etc., and strengthens the promotion of new products such as dialysis powder and blood purification equipment, including: 1) Dialysis powder: a supporting consumables for hemodialysis therapy, which achieved revenue of 74.55 million yuan (yoy +37.6%) in 22; 2) Blood purification equipment: the company's product performance is advanced and diverse. Among them, the star product DX-10 blood purifier achieved revenue of 186 million yuan (yoy +181.8%) in 22. We are optimistic that the company's new products will continue to contribute to increased performance.
The introduction of an employee stock ownership plan is optimistic that it will fully motivate employees
The company released an employee stock ownership plan (draft) on the same day. The plan covers no more than 110 directors, supervisors (excluding independent directors) and core key personnel of the company. The equity was unlocked in two batches, with an unlocking ratio of 50%/50% for each period, and assessed through two levels of company performance and individual performance: the performance assessment indicators at the company level were cumulative net profit of 3.6 billion yuan in 23-25 and 7 billion yuan in 23-27, respectively; the assessment grades for individual performance were divided into three categories: good and above, qualified, and unqualified, corresponding to the share unlock ratio of 100%/70%/0%, respectively. We believe that our employee stock ownership plan shows confidence in the company's long-term development while fully mobilizing the enthusiasm of core employees.
Risk warning: Sales of core products did not meet expectations, and product tenders reduced prices.