BOC Securities: Gives Runda Medical a buy rating

2022-01-20BOCI Securities Co., Ltd. Deng Zhouyu conducted a study on Runda Medical and released a research report "Commercial Sector: IVD Hospital Intensive Service Leader; Industrial Sector: IVD Reagent "CDMO" Re-injected With New Momentum", this report gave a buy rating to Runda Medical, and the current stock price is 13.65 yuan.

Runda Medical (603108)

Event Comments: On January 8, 2022, the company announced that its wholly-owned subsidiary, Shanghai Huizhong Biotechnology Co., Ltd., and Osendo Biotechnology Development (Shanghai) Co., Ltd. signed the "Strategic Cooperation and Joint Venture Agreement", which, if successfully landed, will help the company to upgrade its R&D capabilities and production capacity to higher international system standards, and is expected to inject new momentum into the development of the company's industrial sector.

Points to support the rating

Industrial sector: epitaxial endogenous, is expected to accumulate thick and thin. Through acquisitions and independent research and development, the company has gradually improved the layout of the BUSINESS layout of IVD products, avoided the fierce competition in the market and developed characteristic products, such as saccharification products, quality control products, medical informatization and other products with unique advantages, and has achieved a domestic leading position in some segments. At the beginning of December 2021, the company announced that the Runda Rongjia ARP-6465MD triple quadrupole mass spectrometer system was approved for listing, which is a manifestation of the company's research and development capabilities. The cooperation of Oxendo Biotechnology Development (Shanghai) Co., Ltd. is an important innovation platform outside the R&D center of Oxendo headquarters, Oxendo is one of the pioneer enterprises in the field of in vitro diagnostics in the world, serving the global clinical laboratory and the field of blood transfusion medicine. This cooperation will help the company to upgrade its R&D capabilities and production capabilities to higher international system standards.

Commercial sector: diagnostic services "value depression", undervalued medical laboratory integrated service provider leader. The company is a medical laboratory integrated service provider, the commercial sector is divided into IVD instrument consumables traditional distribution agency business, intensive / regional testing center business and ICL business, intensive / regional testing center business is one of the company's core values, heavy asset ICL business development is faster. As a leader in the comprehensive service of in-hospital medical laboratories in China, the company's value is prominent in the environment of medical insurance cost control. The state promotes the IVD industry to control the general trend and exceeds the previous market expectations, if the future with the IVD reagent price reduction testing project fee reduction, the hospital cost reduction and efficiency increase will be more sufficient. As a professional comprehensive laboratory service provider, in addition to its strong IVD product supply chain, the value of its packaged diversified service business will be more prominent, on the one hand, it can provide better market promotion, product admission and after-sales service for its upstream IVD production enterprise customers, and the demand continues to exist, on the other hand, it can provide diversified services, more efficient operation management, better quality control management, etc. for the cost reduction and efficiency of the hospital laboratory department, so as to better achieve the cost reduction and efficiency of the hospital.

The commercial sector and the industrial sector go hand in hand, and it is worth looking forward to creating a comprehensive medical laboratory service provider in the field of platform-based IVD. On the one hand, the company's business sector intensification / regional inspection center business conforms to the value of medical insurance control policy highlights, the company's business sector will be the company to understand the terminal needs, better understand the development of the industry the best way, so as to provide the industrial sector with more in line with the actual needs of the market strategic guidance, and conducive to the company's industrial product diversion, so as to better increase the stickiness of end customers; on the other hand, the company's industrial sector featured products are one of the basis for the company's commercial sector to provide diversified packaging services. The new cooperative R&D and production model also helps the company to use the advantages of the integrated service platform to provide customers with more and better choices of in vitro diagnostic products. In addition, the company recently issued an announcement on internal business integration and structural adjustment, which will also help the company to develop comprehensively, optimize the internal management structure, clarify the layout of business sectors, promote the integration of self-production business, strengthen the coordination of self-production business, improve the operational efficiency of self-production business, which is conducive to the optimization of the structure of self-production business, fully integrate the company's resources, and improve the efficiency of operation and management.

Valuation

It is estimated that the company's net profit attributable to the parent company in 2021-2023 will be 4.20/5.79/643 million yuan, corresponding to EPS of 0.73/1.00/1.11 yuan, giving a buy rating.

The main risks faced by the rating

The risk of rapid growth of accounts receivable, the risk of less than expected development of end customers, the risk of less than expected research and development of new products in the industrial sector, the risk of goodwill impairment, the uncertainty risk of business integration and the implementation of equity structure adjustment, the risk of uncertainty in the operation of joint venture companies, and the risk of market supervision.

A total of 5 institutions have given ratings and 5 buy ratings in the last 90 days; the average target price of institutions in the past 90 days is 13.3; the Valuation Analysis Tool of Securities Star shows that Runda Medical (603108) good company rating is 3.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 3.5 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)