20210826-招银国际-爱康医疗-01789.HK-Results_of_volume-based_procurement_to_come_out_inmid-September_5页_1mb
报告摘要
AK Medical (1789 HK) Company Update Summary
Core Content
AK Medical, a Hong Kong-listed company, recently reported its first-half of 2021 (1H21) financial results and provided updates on its participation in the national volume-based procurement (VBP) for joint implants. The company also outlined its long-term growth strategy, particularly focusing on its 3D-printed products, and updated its financial forecasts and valuation.
Key Financial Performance (1H21)
- Revenue: RMB448 million (-6.5% YoY), representing 44% of the full-year estimate.
- Net Profit: RMB111 million (+31.6% YoY), accounting for 37% of the full-year estimate.
- Factors Affecting Net Profit:
- Increased selling, G&A, and R&D expenses (up 25%, 33%, and 18% YoY, respectively).
- Decline in gross profit margin (68.9% in 1H21 vs 70.2% in 1H20).
- Channel destocking triggered by the national VBP.
National Volume-Based Procurement (VBP) Details
- Tender Date: 14 September 2021.
- Product Groups:
- Ceramics-on-ceramics (C-on-C) hip joint: 126,797 units (Group A), AK Medical holds 12.1% of the procurement volume.
- Ceramics on polyethylene (C-on-P) hip joint: 142,757 units (Group A), AK Medical holds 16.7% of the procurement volume.
- Metal-on-polyethylene (M-on-P) hip joint: 35,988 units (Group A), AK Medical holds 18.5% of the procurement volume.
- Knee joint: 231,976 units (Group A), AK Medical holds 13.3% of the procurement volume.
- Impact on Sales: The national VBP may lead to potential price cuts and impact profitability, but AK Medical's strong position in the procurement process is expected to support its growth.
3D-Printed Products as a Long-Term Growth Driver
- Revenue Contribution: In 1H21, 3D-printed products accounted for 14% of total revenue (+6% YoY).
- Regulatory Approval: As of 30 June 2021, the company holds 8 Class III registration certificates for 3D-printed products, including 6 standardized and 2 customized products.
- Future Projections:
- 15% of total revenue in FY21E.
- 17% in FY22E.
- 18% in FY23E.
- Opportunities: Hip Hemiarthroplasty and repair products are not included in the national VBP, offering growth opportunities.
Investment Recommendation and Valuation
- Rating: BUY (Maintained).
- Target Price (TP): HK$9.62 (down from previous TP of HK$12.14).
- Current Price: HK$8.12.
- Upside Potential: +18.51% from current price to TP.
- DCF Valuation:
- Equity Value: HK$10,726 million.
- Terminal Growth Rate: 3.0%.
- WACC: 10.03%.
Key Financial Ratios and Performance
| Metric | FY19A | FY20A | FY21E | FY22E | FY23E |
|---|---|---|---|---|---|
| Revenue (RMB mn) | 927 | 1,035 | 971 | 998 | 1,157 |
| YoY Growth (%) | 54.3 | 11.7 | -6.2 | 2.7 | 15.9 |
| Net Profit (RMB mn) | 267 | 314 | 254 | 285 | 358 |
| EPS (RMB) | 0.26 | 0.28 | 0.23 | 0.26 | 0.32 |
| YoY Growth (%) | 83.8 | 11.0 | -20.1 | 12.4 | 25.4 |
| P/E (x) | 26.3 | 23.7 | 29.6 | 26.3 | 21.0 |
| P/B (x) | 6.3 | 3.6 | 3.4 | 3.1 | 2.8 |
| Net Margin (%) | 26.13 | 28.60 | 30.95 | 29.41 | 29.49 |
| ROE (%) | 23.9 | 15.4 | 11.4 | 11.8 | 13.4 |
Financial Projections and Revisions
| Metric | New (RMB mn) | Old (RMB mn) | Diff (%) |
|---|---|---|---|
| Revenue | 971 | 1,026 | -5.3% |
| Gross Profit | 661 | 687 | -3.9% |
| Operating Profit | 296 | 354 | -16.2% |
| Net Profit | 254 | 302 | -15.8% |
| EPS (RMB) | 0.23 | 0.27 | -15.8% |
Peer Valuation Comparison
| Company | Market Cap (HK$ mn) | P/E (x) | P/B (x) | EV/EBITDA (x) | ROE (%) |
|---|---|---|---|---|---|
| AK Medical | 9,058 | 35.1 | 4.0 | 23.0 | 11.4 |
| Kindly Medical | 4,416 | 25.1 | 2.6 | N/A | 9.4 |
| Venus Medtech | 18,170 | 40.35 | 3.2 | N/A | 1.6 |
| Weigao Group | 60,509 | 19.8 | 2.5 | 12.7 | 13.2 |
| Microport | 86,993 | 47.80 | 9.6 | N/A | 7.5 |
| Lifetech | 19,582 | 4.23 | 6.3 | N/A | 9.0 |
| Chunli Medical | 6,813 | 19.70 | 4.0 | 12.0 | 24.8 |
| Average | - | 29.5 | 4.6 | 15.9 | 8.3 |
Catalysts and Risks
- Catalysts:
- Tender wins in the national VBP.
- New product approvals.
- Risks:
- Worse-than-expected price cuts in the national VBP.
Share Performance and Structure
- Market Cap: HK$9,058 million.
- Average 3-Month Turnover: HK$108.62 million.
- 52-Week High/Low: HK$23.50 / HK$7.97.
- Total Issued Shares: 1,116 million.
- Shareholding Structure:
- Management: 55.24%
- Hillhouse: 6.79%
- Free Float: 37.23%
Analyst Certification
- The research analyst certifies that the views expressed in the report accurately reflect their personal views.
- The analyst has no financial interest in the companies covered and has not traded in the stocks within 30 days prior to the report's release.
CMBIS Ratings
- BUY: Potential return of over 15% over next 12 months.
- HOLD: Potential return of +15% to -10% over next 12 months.
- SELL: Potential loss of over 10% over next 12 months.
- NOT RATED: Stock is not rated by CMBIS.
Disclaimer
- This report is for informational purposes only and does not constitute investment advice.
- CMBIS does not provide individually tailored investment advice.
- Past performance is not indicative of future results.
- The value of investments and returns are uncertain and may fluctuate.
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