On October 27, 2021, Prudential Medical (300888) issued an announcement that: Xu Ruixiao of Suzaku Fund, Hao Shuai of BOC Securities, Yang Yuqin of BOC Securities, Feng Chongguang of CITIC Securities, Guo Yun of CITIC Securities, Li Xin of CITIC Securities, Zheng Yikun of CITIC Securities, Zhou Bowen of CITIC Construction Investment, Qiu Ji of CITIC Construction Investment, Wang Yusi of Zhongtai Textile, Zhan Luyu of Zhejiang Securities, Zhao Zhongping of China Merchants Light Industry, Wang Peng of China Merchants Light Industry, Ma Rong of Changjiang Textile, Huang Shuyan of Great Wall Securities, Su Hongren of Galaxy Securities, Zhen Weixuan of Galaxy Securities, and Wang Kaili of Industrial Securities , Cinda Securities Ji Xiaofei, Southwest Securities Zhao Lanting, Southwest Securities Cai Xin, Tianfeng Textile Service Sun Haiyang, Tianfeng Textile Service Tang Shengjiao, Pacific Securities Guo Bin, Capital Securities Chen Meng, Capital Securities Guo Qi, Shenyang Fangying Li Cheng, Shenzhen Venture Capital Nie Li, Shenwan Hongyuan Wang Xiaoxuan, Shenwan Hongyuan Jinling, Shenwan Hongyuan Wang Liping, Shenwan Hongyuan Qian Chenyuan, Shanghai Securities Real Estate Jin Wenxi, Shanghai Xinpu Investment Ouyang Rong, Sanxin Investment Guo Yuyan, JPMorgan Chase Li Wenjun, Kaiyuan Securities Yang Yudong, Kaiyuan Securities Du Zuoyuan, Jinbo Investment Chen Jia, Jiantou Textile Service Yuan Xudong, Jiantou Textile Service Ye Le, Jiantou Textile Service Wei Zhongtai, Huaxi Securities Yang Weiwei, Huatai Light Industry Zhou Xin, Huatai Light Industry Hu Dong, Huajin Securities Wang Feng, Huajin Securities Sun Meng, Huachuang Securities Liu Jiakun, Huaan Pharmaceutical Tan Guochao, Haitong Securities Gao Yu, Haitong Light Industry Lv Kejia, Haitong International Wang Bojin, Guoyuan Securities Xu Yiwen, Guoyuan Securities Li Dian, Guosen Lu Nuotian, Guosen Chen Yaorong, Guosen Ding Shijie, Guosheng Securities Yang Ying, Guosheng Securities Hou Ziye, Guojin Securities Dou Huimin, GF Securities Cao Qianwen, GF Securities Zuo Qinqin, GF Light Industry Zuo Qinqin, Everbright Securities Sun Weiwei, Everbright Securities Zhu Jieyu, Fujian Zeyuan Asset Zhu Zaidao, Dongxing Securities Wei Yumeng, Dongxing Securities Wang Zi, Soochow Securities Zou Wenjie, Soochow Securities Zhang Xiao, Orient Securities Zhao Yuefeng, Orient Securities Zhu Yan, Orient Securities Shi Hongmei, Debon Securities Bi Xianlei, Debon Securities Hua Xiaowei, Debon Light Industry Li Juehan, Caitong Asset Management Zhao Wen, UBS Chen Xin, Point72Clarie, NARD MULTI-STRATEGY SPC ON BEHALF OF NARD GLOBAL LONG SHORT EQUITY SPXuCheng, CICC Fan Junhao, CICC Lv Peihang, Suzaku Fund Li Yang, BOCI Zhang Yansong, BOC International Liu Hang, CITIC Securities Wanda, CITIC Securities Li Youwei, CITIC Securities Liu Jiangchao, CICC Xu Zhuonan, CICC Lin Qianye, China General Technology Li Yue, China General Technology Zhu Yu, Zhejiang Self-operated Chen Shanshan, Zhejiang Yongan Guofu Asset Ye Bin, China Merchants Fund Hou Hao, Changsheng Fund Hao Zheng, Changsheng Fund Lan Tong, Great Wall Self-operated Xu Chao, Great Wall Self-operated Zhao Haoran, AIA Asset Management Huang Wenjing, Yurong Asset Management Zhu Shuyi, Yongying Fund Wang Xinyan, Yijinan Investment Lv Yilin, Virtual Customer Lu Chunyu, Industrial Securities Wu Fan, Industrial Bank Wu Zhengming, Industrial Bank Yu Liqiang, Xingquan Fund Xie Changyan, Cinda Innovation Investment Wang Le, Xincheng Fund Wang Yan, New China Life Insurance Dai Ye, Southwest Securities Liu Zhihua, General Investment Zhang Jiabo, Tian Worm Asset Chen Quan, Shenzhen Uglier Investment Zou Bingjie, Shenzhen Weiming Hengyuan Investment Zhang Lidong, Shenzhen Oriental Marathon Investment Huang Jun, Shenzhen Oriental Marathon Investment Kong Peng, Shenzhen Qianhai Jingzhi Asset Huang Dengfeng, Shenzhen Qianhai Undertaking Capital Wei Meijuan, Shenzhen Qisheng Fund Liu Xuefeng, Shenzhen Venture Capital Shen Xingyuan, Shanghai Ruijun Asset Li Longjun, Shanghai Minghe Investment Yao Yongxiu, Shanghai Electric Fu Juanjuan, Shanghai Investment Xinhua, Shanghai Guo investment He Jianqing, Qingdao Chenghuai Investment Peng Wenwei, Qianhai United Nie Kun, Qianhai Open Source Fund Hou Yifang, Qianhai Open Source Fund Xiao Liqiang, Hefeng Zhengze Asset Management Wang Ya, Wanfang Assets Huang Jun, Ningquan Asset Wu Longhao, Southern Fund Yuan Li, Southern Fund Lv Siqi, Greenland Financial Holding Group Han Xudong, Invesco Great Wall Fund Sun Xuehuan, Invesco Great Wall Sun Xuehuan, BOCOM Schroder Fund Zhang Chen, BOCOM Schroder, Jiangxi Peter Mingqi Asset Lin Weixian, Jianxin Fund Li Ruihong, Harvest Fund Bao Lihua, Huaxia Fund Lin Yao, Hangzhou Kaiyan Investment Yao Yue, Hanhe Capital Liu Han, Haining ShellFish Investment Zhang Jiasheng, Guosen Securities Pi Xilong, Yang Zhongnan of Cathay Fund, Gao Yanyun of Guohai Franklin Fund, Huang Anping of Guangdong Jintai, Zhang Hao of Guanfu (Beijing) Assets, Qin Zong of ICBC Credit Suisse Fund, Lin Lin of ICBC AXA Life Insurance, Wu Yangxue of Wells Fargo Fund, Mao Lianyong of Wells Fargo Fund, Gao Kun of Dongxing Securities Asset Management, Shilin of Debon Fund, Lv Qiao of Tamsui Spring (Beijing), Yang Ye of Tamsui Spring (Beijing) Investment, Lv Qiao of Tamsui Spring (Beijing), Lv Qiao of Tamsui Spring, Fu Xinyu of Dentons Fund, Jia Yanan of Caitong Fund, He Zhichao of Caitong Fund, yulan Capital MANAGEMENT LLC CHEN Zuojia, XINGTAI CAPITALMANAGEMENT LIMITEDChenTingting, TENG Yue Partners, LPWangAnqi, RS Zeng Lingyi, QFM China Master Fund ZhaoShawn, PolymerCapitalEsther Wen, POLYMER CAPITAL MANAGEMENT (HK) LIMITEDSuJessica, Neo criterion YangEffy, Korea Investment Trust Management Co., Ltd Zhang Cenling, HSBC BROKING SECURITIES (ASIA) LTDLiuTerrance, HAITONG INTERNATIONAL HOLDINGS LIMITEDWang Yiqin, Green Court CapitalYing Gan, DANTAI CAPITAL LIMITED Jiawei Zhang, china alpha fund management (HK) LimitedLIUBen surveyed our company on October 26, 2021.
The main contents of this survey are:
Q: Regarding the cotton era, the growth of the cotton era in the second quarter was only single digits, and the company made a lot of adjustments in the third quarter to increase to double-digit growth. Can you look forward to the future development of this business?
A: The growth rate of the entire consumer goods business in the third quarter has accelerated sequentially, and the main measures taken are: 1) increased brand building to convey the concept of healthy parenting and a better life to consumers; 2) in terms of channels, we have stabilized the growth of traditional e-commerce platforms in the third quarter; 3) we have also broken through the cooperation of some key KA channels, such as RT-Mart's layout is now expanded to East China and South China. Traditional e-commerce, offline KA and official website mini programs were our main growth engines in the third quarter, which greatly improved our growth rate. Sales in the third quarter of the cotton era were affected by some objective factors: 1) Store sales were affected by sporadic epidemics, and some stores had to close stores for a short time at the request of shopping malls. 2) The impact of the high base of epidemic commodity sales in the third quarter of last year. Last year, there was a diversion of mask products under the epidemic, and although we did not have the traffic dividend brought by mask products this year, after our strategic optimization, the third quarter still achieved a more obvious increase than the second quarter. 3) Autumn and winter clothing products in the third quarter were affected by the high temperature factors, but with the advent of a wide range of cold air in the fourth quarter, the sale of spun goods will accelerate. Looking ahead, we will continue to strengthen brand building and strengthen the dissemination of the cotton concept. On October 13th, our products were unveiled at Shanghai Fashion Week, also to pass on the cotton concept to our consumers. In the fourth quarter, we will continue to do a good job of crowd breaking the circle, focusing on being healthy, picking 100% cotton, and continuing to do a good job in consumer communication.
Q: What was the data business structure of the company's online business in the first three quarters? What is the layout of the company's new channel on Douyin Kuaishou?
A: In the third quarter compared with the second quarter, our growth in e-commerce is accelerating, especially in the traditional e-commerce platform. For emerging channels, in Douyin, we break through more categories through live broadcasting and brand self-broadcasting, and accelerate the layout of interest e-commerce as a traffic window.
Q: What is the specific magnitude of douyin? What agreement do we have with the platform?
A: We have signed a year frame cooperation with both mother and baby and personal care. Specific data is not convenient to disclose.
Q: At the end of the third quarter, how did the company's medical sector compare the epidemic prevention materials and the price angle compared with last year?
A: From the perspective of volume price, the volume price of the third quarter against last year has decreased. There was no significant change in prices compared to the second quarter of the previous quarter. Conventional mask companies have not defined it as an epidemic prevention product, but positioned it as a daily product, which is a future consumer travel, sunscreen, fashion products, it will be an important product for us.
Q: As of the third quarter, there are 53 new stores, will the goal of opening stores in 2021 be adjusted?
A: In the first half of the year, due to the outbreak of the dot-like epidemic, the opening of some shopping malls was delayed, which in turn led to the postponement of our store opening plan, so we expect that the number of new stores will be less than 100. In terms of store output, we continue to improve the efficiency of the ping, we must strengthen cooperation with the head of commercial real estate, do cross-drainage, enhance the brand's visibility in the mall. In addition, our stores will provide consumers with good service, and we will continue to improve the level of consumer experience services in stores. Our stores are now also implementing the top30 plan and the plan of millions of shopping guides, and we must select some top stores and top shopping guides to create benchmark cases and improve the overall refined operation level of stores.
Q: Is there a reason for the decline in the gross profit margin Q3 in a single quarter?
A: The reason for the decline in gross profit margin in a single quarter: From the perspective of the company as a whole, first, it is because of changes in product structure, mainly changes in protective clothing and N95 masks, which affected the gross profit margin. Second, the price of various commodities such as cotton and crude oil has risen this year, resulting in an increase in production costs, so the gross profit margin has declined.
Q: Can you update the situation of our admission to the hospital in Q3 and the expectations for the entire medical dressing product?
A: The products we entered the hospital achieved a growth of 21.8% year-on-year compared with last year, a 5-fold increase over 2019. Mainly we are in the surgical kit, operating room consumables two products quickly occupy the market. At the end of September, we had covered about 4,000 hospitals, especially some of the top 500 hospitals. Prudential medical is also very large at the TOC side. According to market data, the household medical device industry, from a global perspective, grew from $17.9 billion in 2010 to $26.2 billion in 2016, with a CAGR of 6-7%. From China's point of view, the entire Chinese medical treatment was 48 billion in 2015, and by 118.9 billion in 2019, the CAGR was 25%. Prudential Medical just cuts from the hospital end to the toc side, and we think the opportunities here are very great.
Q: The shipping capacity is relatively tight, will it affect the gross profit margin of overseas business?
A: Our sea freight quotation has two forms, we have both a quotation with freight and a quotation without freight. Including the freight part, we have an agreement with the customer that we will adjust the price according to the fluctuation of the freight. In response to the tight capacity problem, we have also arranged some of the space, which can also alleviate the problem of tight freight.
Q: Is there a good opportunity for M&A integration in the industry? In what direction does the company think M&A integration is going?
A: Our industry is relatively fragmented, and we will seize the opportunity to integrate it, not only in terms of products, but also in terms of channels. We will also pay attention to risks, and will carry out risk management and control for industry integration mergers and acquisitions.
Q: What directions will the company focus on?
A: As long as it is related to the company's main business, we will pay attention to it, and those that are not related to the main business will not be considered for the time being.
Q: From the overall point of view, in what direction will the company focus on the layout?
A: For corporate strategy, we have set up a special strategy and social responsibility committee. At present, the proportion of the medical sector and the consumer sector is about 50%, and it will go hand in hand in the future. We will adhere to the core of cotton, create products recognized by consumers, and form synergy.
Q: What was the sales structure of the cotton era? What is the resource layout?
A: Looking at the cotton era alone, our non-woven products are short-term affected by the price of chemical fiber products, and there is a large increase in textile products this year, but both the cotton era has huge growth space, non-woven can help brands achieve the role of pulling new shopping frequency, and spinning as a good support for expanding customer unit prices and user life cycles, so the company will continue to have a resource layout of spinning and non-woven starting together. Summary: In the medical sector, our protection products declined in the third quarter due to high base. But as the high base gradually passes, our performance will also return to normal levels. The company's stable medical toc products accounted for 30%, there is also a growth rate of 30%, the family medical consumables market size CAGR reached 25%, so the growth rate of stable medical toc-end products is higher than the market growth rate. In terms of consumer goods, in terms of channels, we have a comprehensive layout online and offline, and the repurchase rate and conversion rate of various channels are gradually increasing, which gives us great confidence. The 53 new stores added this year, some self-operated, some franchised, and some first-, second- and third-tier cities, will bring growth momentum to our performance. On the brand side, the company had more interaction with consumers in the third quarter. The concept of the entire cotton era is comfortable, healthy and environmentally friendly, and in the context of the double carbon target, the company's products are increasingly recognized by consumers. We believe the company will get better and better in the future.
The main business of steady medical care: research and development, production and sales of cotton products, covering medical and health, personal care, home care, maternal and child care, home textiles and apparel, etc
According to the third quarterly report of Prudential Medical in 2021, the company's main revenue was 5.82 billion yuan, down 38.89% year-on-year; the net profit attributable to the mother was 1.104 billion yuan, down 64.95% year-on-year; the non-net profit was 949 million yuan, down 69.71% year-on-year; among them, in the third quarter of 2021, the company's single-quarter main revenue was 1.76 billion yuan, down 67.06% year-on-year; the single-quarter net profit attributable to the mother was 343 million yuan, down 83.8% year-on-year In a single quarter, the non-net profit was 321 million yuan, down 84.76% year-on-year; the debt ratio was 19.25%, the investment income was 68.657 million yuan, the financial expense was -42.7751 million yuan, and the gross profit margin was 49.05%.
In the past 90 days, a total of 25 institutions have given ratings, 17 buy ratings and 8 overweight ratings; the target average price of institutions in the past 90 days has been 104.09; the net outflow of financing in the past 3 months has been 47.8752 million, and the balance of financing has decreased; the net outflow of margin is 63.5292 million, and the balance of margin has decreased. The Securities Star Valuation Analysis Tool shows that Prudential Medical (300888) has a good company rating of 3 stars, a good price rating of 2 stars, and a comprehensive valuation rating of 2.5 stars.