20220822-招银国际-康德莱医械-01501.HK-Solid_growth_demonstrates_a_rapid_recovery_from_COVID_6页_855kb

报告摘要

Kindly Medical (1501 HK) Summary

Core Content

Kindly Medical (1501 HK) reported a strong performance in the first half of 2022 (1H22), demonstrating a rapid recovery from the impact of the COVID-19 pandemic. The company achieved revenue of RMB225.2 million, representing a 24.7% YoY increase from RMB180.6 million in 1H21. This growth was primarily driven by a 12.1% YoY increase in interventional medical devices sales and an additional RMB22 million from the new agent business focused on cardiovascular imaging devices. Attributable net profit slightly increased by 0.47% YoY to RMB50.84 million.

Despite the COVID lockdown in Shanghai during the second quarter of 2022, which impacted nationwide PCI surgery volumes, the company's interventional medical devices sales remained resilient, contributing 89.2% of total revenue. The strong performance is attributed to the company's comprehensive product portfolio, extensive distribution network, and competitive cost advantages.

By the end of June 2022, Kindly Medical had expanded its distributor network to over 2,300 hospitals, including 850 Tier III hospitals, showing robust market penetration. The agent business has emerged as a new growth pillar, focusing on cardiovascular imaging devices, which complement the company's core offerings and help strengthen relationships with existing distributors.

Main Points

Revenue Growth:
- 1H22 revenue: RMB225.2 million (+24.7% YoY)
- Interventional medical devices sales: +12.1% YoY
- Agent business: +RMB22 million in revenue
Profitability:
- Attributable net profit: RMB50.84 million (+0.47% YoY)
- Net profit margin: 28.1% (2022E), with a steady increase over the years
Earnings Forecasts:
- FY22E revenue: RMB614.4 million (+32.2% YoY)
- FY23E revenue: RMB773.6 million (+25.9% YoY)
- FY24E revenue: RMB963.9 million (+24.6% YoY)
- Net profit is expected to grow from RMB167.4 million in FY22E to RMB266.1 million in FY24E
Valuation Metrics:
- P/E ratio: 22.8 (FY22E), 18.3 (FY23E), 14.5 (FY24E)
- P/B ratio: 2.5 (FY22E), 2.3 (FY23E), 2.1 (FY24E)
- Target Price: HK$31.39 (maintained from previous TP of HK$31.46)
- Current Price: HK$27.00
- Up/Downside: 16.3%
Research Recommendations:
- Maintain BUY rating
- Forecasted 32% YoY revenue growth in FY22E
- Based on a 9-year DCF model

Key Financial Highlights

Revenue Growth:
- FY20A: RMB358.4 million
- FY21A: RMB464.7 million
- FY22E: RMB614.4 million
- FY23E: RMB773.6 million
- FY24E: RMB963.9 million
Gross Profit:
- FY22E: RMB350 million
- FY23E: RMB441 million
- FY24E: RMB554 million
Operating Profit:
- FY22E: RMB188 million
- FY23E: RMB237 million
- FY24E: RMB300 million
Net Profit:
- FY22E: RMB167.4 million
- FY23E: RMB210 million
- FY24E: RMB266.1 million
EPS (Reported):
- FY22E: RMB1.0
- FY23E: RMB1.3
- FY24E: RMB1.6
Growth Rate Projections:
- Revenue growth: 32.2% (FY22E), 25.9% (FY23E), 24.6% (FY24E)
- Net profit growth: 19.1% (FY22E), 24.7% (FY23E), 26.1% (FY24E)

Financial Ratios

Gross Margin: 56.93% (FY22E), 57.00% (FY23E), 57.50% (FY24E)
Operating Margin: 30.67% (FY22E), 30.57% (FY23E), 31.09% (FY24E)
Net Margin: 28.05% (FY22E), 27.78% (FY23E), 28.12% (FY24E)
ROE: 11.4% (FY22E), 12.9% (FY23E), 14.6% (FY24E)
Net Debt to Equity: 0.4 (FY22E), 0.3 (FY23E), 0.3 (FY24E)
Current Ratio: 4.3 (FY22E), 3.9 (FY23E), 3.6 (FY24E)

Shareholding and Performance

Major Shareholders:
- Kindly Holding: 25.8%
- Huaige Health Investment: 9.3%
Stock Data:
- Market Cap: HK$4,536.0 million
- 3-Month Average Trading Volume: HK$21.6 million
- 52-Week High/Low: HK$29.45 / HK$11.20
- Total Issued Shares: 168.0 million
Share Performance:
- 1-Month: +9.8%
- 3-Month: +90.7%
- 6-Month: +70.0%

R&D and Innovation

Approved Medical Devices:
- 4 Class III and 2 Class II medical devices in 1H22
Patents and Intellectual Property:
- 223 registered patents
- 172 patents under application
- 5 registered software copyrights

Valuation and Sensitivity Analysis

DCF Valuation (RMB million):
- 2022E: 3,948
- 2023E: N/A
- 2024E: N/A
- 2030E Terminal Value: 6,841
Sensitivity Analysis:
- Terminal Growth Rate Impact on Equity Value:
  - 3.0%: HK$39.66 million
  - 2.5%: HK$37.75 million
  - 2.0%: HK$36.09 million
  - 1.5%: HK$34.62 million
  - 1.0%: HK$33.31 million

Investment and Cash Flow

Net Cash from Operations:
- 2022E: RMB182 million
- 2023E: RMB203 million
- 2024E: RMB255 million
Capital Expenditure:
- 2022E: RMB200 million
- 2023E: RMB150 million
- 2024E: RMB150 million
Net Cash from Financing:
- 2022E: RMB754 million
- 2023E: RMB-28 million
- 2024E: RMB-52 million
Net Change in Cash:
- 2022E: RMB586 million
- 2023E: RMB590 million
- 2024E: RMB629 million

Analyst Notes

Research Analysts:
- Jill WU, CFA
- Cathy WANG
Ratings:
- BUY: Potential return of over 15% over next 12 months
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over next 12 months
Disclaimer:
- The report is for informational purposes only and not investment advice
- CMBIGM does not guarantee accuracy or completeness of the data
- Investors should consult professional financial advisors