On June 18, Jiangsu Weikang Jiejing Medical Devices Co., Ltd. (hereinafter referred to as "Weikang Medical") updated its prospectus, planning to issue no more than 2134 shares to the public, and plans to invest 345 million yuan in raised funds for the medical device research and development center Construction and other projects. According to
's review of the prospectus, Weikang Medical's revenue growth rate is slow and its gross profit margin is declining. The unit price of the largest main product and the sales volume of some products have a downward trend. cost. In the past two fiscal years, the government subsidies received by Weikang Medical accounted for more than 20% of the current net profit, and the amount of export tax rebates also had a great impact on the company's profits. In addition, Weikang Medical's current market segment is highly competitive, and the company's market share has also shown a downward trend even though it is not too high. The future sustainable profitability has yet to be tested by the market.
It is worth mentioning that Weikang Medical submitted its prospectus in September 2017. In the old version of the prospectus, the company’s product quality issues received attention. In the latest prospectus, the company has another batch of The secondary product was listed as not up to standard in the random inspection by State Food and Drug Administration.
Revenue growth is slow
The unit price of the largest main product continues to drop
The prospectus shows that the main business of Weikang Medical is the research and development, production and sales of disposable medical consumables. The main products are divided into surgical care, breathing, Five series of anesthesia, urology and puncture. From 2016 to 2018, Weikang Medical achieved operating income of 215 million yuan, 244 million yuan and 245 million yuan respectively, a year-on-year increase of 6.91%, 13.75% and 0.12% respectively. It is not difficult to see that the revenue growth rate of Weikang Medical has slowed down in the past three years, and the revenue in 2018 has only increased by 300,000 yuan compared with 2017.
The reason for the slow growth of Weikang Medical's revenue is related to the decrease in the unit price of the main products and the decrease in sales of some products. According to the prospectus, the unit price of Weikang Medical’s suction tube products has been decreasing year by year. From 2016 to 2018, the sales revenue of suction tube products was 65.7109 million yuan, 360,700 yuan and 80.803 million yuan respectively, accounting for 30.58%, 30.01% and 33.01% of the total operating income in the current period, and it is the company's largest mainstay. marketing products. Although the sales revenue of suction tube products is increasing, their sales unit price and gross profit margin are both declining. During the reporting period, the sales unit prices of suction tube products were 2.6247 yuan/piece, 2.5882 yuan/piece and 2.5447 yuan/piece, and the gross sales margins were 43.82%, 40.36% and 39.61% respectively. According to the prospectus of
, the sales unit price of nebulized inhaler products is also declining. From 2016 to 2018, the sales revenue of nebulized inhaler products were 1753.73 ten thousand yuan, 23.741 million yuan and 22.3834 million yuan respectively, accounting for 8.16%, 9.71% and 9.15% of the total operating income of the current period; the sales unit price was 5.3885 yuan respectively /piece, 5.2083 yuan/piece and 4.9750 yuan/piece, a year-on-year decrease of 3.34% (2017) and 4.48% (2018) respectively. In addition, the sales of some Weikang medical products are also declining. From 2016 to 2018, the sales revenue of nasal oxygen tube products was 24.6767 million yuan, 22.4526 million yuan, and 213711 million yuan, which decreased year by year, and the sales volume of this product also decreased year by year. The sales volume during the reporting period was 2137 .14 million, 17.2887 million and 1497.30 million.
Affected by the decrease in sales unit price of some products and the increase in unit cost, the gross profit margins of Weikang's main business are 47.17%, 45.45% and 45.31%, respectively, showing a decreasing trend year by year. The prospectus also shows that the concentration of Weikang Medical's top five customers is also on the rise. From 2016 to 2018, the sales revenue of the company's top five customers were 90 million yuan, 119 million yuan and 118 million yuan, respectively, accounting for 41.91%, 48.52% and 49.28% of the main business revenue.
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government subsidies accounted for 20% of the net profit. From 2016 to 2018, Weikang Medical’s net profit attributable to the parent was 49 million yuan, 62 million yuan and 71 million yuan, respectively, a year-on-year increase of 16.08%, 26.3% and 14.43%. It seems that the growth rate of Weikang Medical's net profit is faster than the growth rate of revenue in the same period, but excluding the impact of non-recurring gains and losses, the growth rate of the company's net profit has also dropped to single digits. During the reporting period, Weikang Medical's net profit after deduction of non-returning to the parent company was 47 million yuan, 51 million yuan and 55 million yuan respectively, a year-on-year increase of 18.28%, 7.67% and 8.97% respectively.
It is not difficult to see that Weikang Medical’s non-recurring gains and losses in 2017 and 2018 were relatively large, with the amounts being 12 million yuan and 16 million yuan, accounting for 19.35% and 22.54% of the current net profit respectively. Among the non-recurring profit and loss items, government subsidies included in the current profit and loss accounted for the highest proportion. The amounts in 2017 and 2018 were 16 million yuan and 15 million yuan, accounting for about 25.8% and 21.13% of the current net profit, exceeding 20%.
In addition, in 2018, Weikang Medical also reduced costs and increased profits by reducing sales and management expenses. From 2016 to 2018, Weikang Medical’s sales expenses were 21.0165 million yuan, 214276 million yuan, and 20.0877 million yuan, a decrease of 6.25 percentage points in 2018. The sales expense ratios were 9.78%, 8.77% and 8.21% respectively, year by year decrease. In the subdivision of sales expenses, employee compensation accounts for a relatively high proportion and the downward trend is also obvious. The amounts from 2016 to 2018 were 8.9563 million yuan, 8.7554 million yuan and 8.3073 yuan respectively. The company explained that the main reason for the year-on-year decline in employee salaries was the decrease in the number of sales staff in the company. From 2016 to 2018, Weikang Medical’s sales staff were 73, 70 and 61 respectively, and the decline in 2018 exceeded 10%.
The administrative expenses of Weikang Medical are also showing a downward trend. From 2016 to 2018, the company's administrative expenses were respectively 15032,500 yuan, 17.2344 million yuan and 14613,700 yuan, and the management expense ratios were 6.99%, 7.05% and 5.97%. Weikang Medical said that the decrease in the company's management expenses in 2018 compared to 2017 was mainly due to the decline in consulting service fees and employee salaries, and the decline in employee salaries was mainly due to the decline in the number of management personnel. From 2016 to 2018, the employee salaries of Weikang medical management personnel were 6.0488 million yuan, 5.9905 million yuan and 5.2474 million yuan respectively.
However, comparing the two prospectuses disclosed by Weikang Medical, it can be seen that the number of managers at the end of 2018 is one more than that at the end of 2017. At the end of 2018, Weikang Medical had 26 management personnel, and the number at the end of 2017 was 25. It is worth mentioning that the remuneration paid by the issuer to directors, supervisors and senior managers has been increasing year by year. The data from 2016 to 2018 were 18704 million, 3.028 million yuan and 3.1914 million yuan respectively. The prospectus of
also shows that Weikang Medical received a relatively large amount of export tax rebates during the reporting period. From 2016 to 2018, the total export tax rebates received by Weikang Medical and its subsidiaries were 15655,800 yuan, 19.0137 million yuan and 16.5201 million yuan respectively. Weikang Medical said that in recent years, country has adjusted the export tax rebate rate several times. If country further adjusts the export tax rebate rate of the company's related products in the future, it may have an adverse impact on the company's financial status.
The market share has dropped. The prospectus shows that Weikang Medical is in a subdivided market under the medical device industry—the medical consumables industry. According to the data in the "China Medical Device Blue Book (2019 Edition)", the scale of my country's medical device market and medical consumables market segments are increasing, but Weikang Medical's market share is not high and is declining. 2014-In 2018, the domestic medical device market size increased from 255.6 billion yuan in 2014 to 530.4 billion yuan in 2018, with a compound annual growth rate of 15.72%.
According to the data in the blue book, the segmented market size of medical consumables reached 641 billion in 2018, and the market share of Weikang Medical is about 0.38%. According to the Industrial Securities (6.710, -0.09, -1.32%) research report, the market size of medical devices in 2017 was 442.5 billion yuan, and the scale of low-value medical consumables subdivisions accounted for 13%, about 57.525 billion yuan , the market share of Weikang Medical is about 0.43%.
Weikang Medical also admitted frankly in the prospectus that with the development of technology, the improvement of medical demand and the intensification of market competition, the medical consumables market will inevitably face the process of survival of the fittest, and the market will gradually concentrate in the hands of enterprises with core competitiveness. In the process of competition, some of Weikang Medical's peer listed companies have achieved faster performance growth, and their market share is also increasing.
In 2018, Weigao achieved an operating income of 8.809 billion yuan, a year-on-year increase of 39.71%; Ogilvy Medical achieved an operating income of 1.998 billion yuan, a year-on-year increase of 18.49%; Zhende Medical achieved an operating income of 1.418 billion yuan, a year-on-year increase of 9.37%; Realized operating income of 1.446 billion yuan, a year-on-year increase of 15.14%; Weili Medical achieved operating income of 740 million yuan, a year-on-year increase of 18.41%; Sanxin Medical achieved operating income of 531 million yuan, a year-on-year increase of 31.55%. In terms of revenue scale and growth rate, Weikang Medical is inferior to the above-mentioned peer companies in the same period.
In the current increasingly fierce competition in the industry, Weikang Medical’s revenue growth is slow and its market share is also declining. How to maintain sustainable profitability in the future remains to be tested by the market.
Replacing a brokerage firm and sprinting for IPO
Product quality still needs attention
As early as September 2017, Weikang Medical submitted a prospectus to list in A shares. In the 2017 version of the prospectus, Weikang Medical’s counseling agency is Debon Securities , and the issuer’s lawyer is Beijing Zhonglun Law Firm. In the prospectus disclosed this time, Weikang Medical’s counseling agency was changed to Zhongyuan Securities, and the issuer’s lawyer was changed to Guohao Lawyers (Hangzhou) Firm. Combining the two versions of the prospectus, we can see that Weikang Medical has been punished for product quality many times. In October 2015, the disposable organ cannula produced by the subsidiary Suzhou Weikang was punished because the production did not meet the registered product standards; He was punished for not maintaining the effective operation of the quality management system during the process; in September 2018, the State Food and Drug Administration issued a sampling announcement showing that one batch of vacuum control devices for disposable sputum suction tubes produced by Weikang Medical did not Comply with standard regulations.
Due to product quality problems, the products of Weikang Medical have encountered the embarrassment of being returned. According to the old version of the prospectus, from 2015 to 2017, the amounts returned by customers due to product quality of Weikang Medical were 34,000 yuan, 42,900 yuan, and 63,900 yuan respectively. Although the proportion is not high, there is an increasing trend.
In addition, Weikang Medical’s investment projects and total funds raised have also changed. In the old version of the prospectus, the fundraising projects were expansion projects with an annual output of 4.5 million silicone catheters and 7 million anesthesia masks; an annual output of 48 million suction tubes, 10 million drainage bags, , and one-way valves. 25 million new projects; medical device marketing network project and medical device R&D center construction project, it is planned to use raised funds of 316 million yuan. The latest prospectus shows that the "Medical Device R&D Center Construction Project" that Weikang Medical originally planned to invest in has been changed to the "Medical Polymer Materials Research Institute Construction Project", and the planned use of raised funds has become 345 million yuan.
Although the overall production capacity utilization rate of Weikang Medical is relatively high, the production capacity of some products may face rapid expansion. If the sputum suction tube and drainage bag project is completed, the company's annual output of sputum suction tube will expand from 38 million to 86 million; the annual output of drainage bags will change from 180 to 1180 ten thousand. (Zhong Wen/Text)
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