(I)
Let's first look at the income structure of each family:
First, the new industry - its mainly based on reagent sales. In 2020, its reagent revenue accounted for 77.68%, and instruments and supporting software accounted for 17.46%.
Its sales model is mainly distribution, supplemented by direct sales, and its instruments are all sales rather than delivery mode.
Chart: Revenue structure (unit: 100 million yuan)
Source: Tajian Research
Around 2017, the revenue of immunodiagnostic products fell from 66% to 52%, and the total biochemical diagnostic self-production + agency business reached more than 10% (biochemical diagnosis is the acquisition of Shengshi Junhui China biochemical business and BIOTaikang). In 2020, its reagent revenue accounted for 79.9%.
Antu Bio is mainly based on distribution, supplemented by direct sales, and its main business model is to sell supporting reagents with free delivery equipment.
Third, Yahuilong - in 2020, self-produced reagents accounted for 49.15% of the total revenue, and the proportion of agent reagents in the total revenue was 20.06%.
Fourth, Pumen Technology - in vitro diagnostics, reagents and equipment contribute equally to revenue, in 2020 reagent revenue accounted for 36.8%, equipment revenue accounted for 33.21%; treatment and rehabilitation, mainly medical products (27.63%), including photon therapy instrument, air wave pressure therapy instrument, infrared treatment instrument, high-frequency sputum exhaust instrument, multi-functional debridement instrument, etc.
In addition, its equipment is mainly sold by dealers.
Overall, in terms of reagent revenue scale, from high to low, antu Bio (2.379 billion yuan) > new industry (1.705 billion yuan) > Yahuilong (691 million yuan) > Pumen Technology (204 million yuan).
(2)
Next, we put together revenue and profit growth in recent quarters to perceive the growth trend:
First, the growth rate of income
Chart: Revenue growth rate (unit: %)
From the perspective of income growth rate, the growth rate of Pumen Technology is relatively stable, the other three fluctuate greatly, and the higher growth rate of 2021Q1 is due to the impact of previous health events and the low base.
Revenues from both New Industries and Antu Bio both declined in Q1 2020 due to the decline in demand for non-COVID-19 testing due to the impact of health events.
Among them, the growth rate of Antu Bio in 2020 is relatively low, due to the late listing of its new crown products, and it began to contribute to growth in the third quarter, missing the peak of benefits at that time;
The growth rate of new industries has recovered rapidly, because the new industry in 2020Q2 is the first company in China to launch a new crown antibody test reagent and obtain CE certification, and it is sold in large quantities in the European Union, the Americas and other areas with serious health incidents.
Compared with several others, the growth rate of Pumen Technology in 2020Q1 is relatively stable, because of the difference in revenue structure, the proportion of Pumen Technology's reagent business is smaller than that of others, and under health events, its hospital business (medical products) still maintains growth.
Second, the growth rate of net profit attributable to the mother
Figure: Growth rate of net profit attributable to the mother (unit: %, right axis - Yahuilong)
From the perspective of net profit attributable to the mother, the overall trend is consistent with the revenue trend. thereinto
The negative growth rate of Antu Bio's 2020Q2-Q3 attributable net profit attributable to the parent is due to the impact of the increase in financial expenses and the loss of bad debts in accounts receivable.
The growth rate of the new industry's 2021Q2-Q3 attributable net profit was negative, due to the growth rate of operating costs higher than the growth rate of revenue, as well as the amortization of share incentive expenses, resulting in a large increase in management expenses.
Yalonghui's 2021Q2-Q3 attributable net profit growth rate was negative, due to the growth rate of operating costs higher than the growth rate of revenue, and the increase in product research and development investment.
(III)
After perceiving the growth trend, we will then take apart the revenue and profit of each company:
First, the new industry - 2021Q3 achieved revenue of 1.894 billion yuan, an increase of 20.6% year-on-year; net profit attributable to the mother was 666 million yuan, an increase of -4.67% year-on-year.
1) Analysis from the growth rate of a single quarter:
In the single quarter of 2021Q3, revenue was 668 million yuan, +11.31% year-on-year, -3.63% sequentially; net profit attributable to the mother was 237 million yuan, +6.5% year-on-year, and -8.97% sequentially.
Q3 performance growth is stable, installed capacity is steadily advancing, and the coverage rate of top three hospitals has increased. Attributable net profit grew slower than revenue, mainly due to higher costs, higher management expenses and finance expenses due to amortized equity incentive expenses and exchange gains and losses.
Chart: Revenue & Attributable Net Profit and Growth
Source: Tajian Research
2) Looking back at the growth of the previous quarters:
The sharp increase in net profit attributable to the parent in 2020Q2 was due to other income (government subsidies) and investment income (income from wealth management products).
Second, Antu Bio - 2021Q3 achieved revenue of 2.695 billion yuan, an increase of 31.6% year-on-year; net profit attributable to the mother of 717 million yuan, an increase of 39.33% year-on-year.
2) Analysis from the growth rate of a single quarter:
In the single quarter of 2021Q3, revenue was 1.018 billion yuan, +20.92% year-on-year, +18.25% q-o-q; net profit attributable to the mother was 304 million yuan, +26.45% year-on-year, +26% q-o-q. Q3 revenue growth is stable, the chemiluminescence business is installed steadily, and other biochemical reagents and microbial detection reagents have also achieved good results.
Chart: Revenue & Attributable Net Profit (Unit: 100 million yuan)
2) Looking back at the growth of the previous quarters:
In 2021Q1-Q2, the downward trend of revenue growth was due to the repeated health incidents in many places and the impact of floods in Zhengzhou, and the business growth was slower. Overall, the revenue growth rate in 2021 is better than in 2020, in addition to the business recovery after the health incident, its new crown detection reagents in 2020Q3 after the sale of volume, but also a positive promotion of revenue.
3. Yahuilong - 2021Q3 achieved revenue of 857 million yuan, an increase of 20.9% year-on-year; net profit attributable to the mother was 155 million yuan, an increase of 3.92% year-on-year.
1) Analysis from the growth rate of a single quarter:
In the single quarter of 2021Q3, revenue was 309 million yuan, +10.28% year-on-year, -1.06% q-o-q; net profit attributable to the mother was 0.66 billion yuan, +37.16% year-on-year, +30.44% q-o-q. In terms of single-quarter revenue, the overall testing tends to be normalized and the performance is stable. In terms of net profit attributable to the mother, it benefited from other income (mainly government subsidies) and investment income (wealth management products), and the growth rate was better.
The negative attributable net profit in 2020Q1 was due to the impact of health events, business development was blocked, and costs were higher than revenue.
Fourth, Pumen Technology - 2021Q3 achieved revenue of 544 million yuan, an increase of 38.33% year-on-year; net profit attributable to the mother was 122 million yuan, an increase of 31.57% year-on-year.
1) Analysis from the growth rate of a single quarter:
In the single quarter of 2021Q3, the revenue was 188 million yuan, +40.3% year-on-year, -1.91% sequentially; the net profit attributable to the mother was 0.4 billion yuan, +70.59% year-on-year, and 40.03% sequentially.
Q3 performance maintained rapid growth, mainly due to the small amount of revenue, at the same time, the amount of new reagents to promote the rapid growth of IVD revenue, 2021Q3 newly approved hyaluronic acid (HA) determination kit and serum amyloid A (SAA) determination kit two registration certificates, enriched the inflammation detection, liver fibrosis detection projects.
The negative growth rate of net profit attributable to the mother in 2021Q2 is due to the high R&D investment in the current period, and it is developing a large number of products, including electrochemiluminescence analysis reagents, high-speed electrochemilumine analyzers, new glycosylated hemoglobin analyzers, multi-parameter specific protein analyzers, etc., resulting in a higher growth rate of operating costs than the growth rate of operating income.
(Wanton)
After comparing the growth, let's look at the changes in profit margins and expense ratios.
First, the cost structure -
The cost composition of IVD products is mainly based on direct materials, accounting for more than 70% of the total cost. Raw material costs increase with production and sales.
Second, the gross profit margin -
Chart: Gross margin (in %)
Compared with the gross profit margin, the gross profit margin of the new industry is significantly higher than that of the other three, which is due to the difference in the structure of the reagent product. The new industry reagent products are all chemiluminescent immunoassay reagents, the product gross profit margin is higher, while the other three also have other types of reagents (such as microbial detection, biochemical analysis, etc., the gross profit margin of these product reagents is low) or other businesses.
Third, the net interest rate -
Chart: Net Interest Rate (in %)
In terms of net profit margin, each company fluctuates greatly, of which: The net profit margin of Pumen Technology 2020Q1 has risen against the trend, because of business differences, and the remaining three reagent testing businesses account for a relatively large proportion, affected by health events, and the testing decline is larger.
In addition to the reagent business, Pumen Technology also has a part of the treatment and rehabilitation business, affected by health events, the business product demand growth, such as sputum discharge meter. Moreover, the increase in the net profit margin of Pumen Technology in 2021Q1 is due to the increase in gross profit margin, due to the growth of in vitro diagnostic equipment and supporting reagents, the scale effect has emerged, and the gross profit margin of the product has increased. The decline in the net profit margin of new industries 2021Q1 is due to a slight decline in gross profit margin, due to the fact that its instruments are mainly sales- and only a small amount is released, and the average selling price of its chemiluminescent instruments and supporting software has decreased. The second is the increase in management expenses and research and development expenses. The sharp recovery in Yahuilong's 2020Q2 net profit margin was due to the Q1 loss and low base.
Fourth, the cost ratio -
Figure: Expense rates
In terms of sales expense ratio, there is little difference between the whole companies. Among them, the relatively high Q1 of Yalonghui 2020 is due to the decline in revenue affected by health events in the current period, and a slight increase in marketing for product promotion. In terms of management expense ratio, the overall trend of new industries is on the rise, mainly due to the gradual increase in personnel recruitment with the expansion of business scale, as well as the increase in the salary level of managers. In terms of R&D expense rate, Pumen Technology is higher than several others, because it continues to increase R&D investment, multiple R&D centers are started at the same time, and there are more R&D personnel, accounting for 33% of the company's total number.
Fifth, the return of the -
Figure: DuPont analysis and dismantling
Overall, the returns of new industries are higher than those of others, mainly because their net profit margins are quite high.