科华生物(002022.CN)

Shanghai Kehua Bio-engineering:H116results in line

时间:16-08-25 00:00    来源:瑞银证券

H116 earnings growth in line with our expectations

H116 revenue jumped 19.06% YoY to Rmb690m and net profit rose 10.46% YoY toRmb138m. Meanwhile, EPS came in at Rmb0.27. In the face of strengthened regulatorysupervision of the in vitro diagnostics (IVD) sector and increased competition, Kehuaadhered to a development strategy of "organic growth + inorganic expansion" topromote steady business growth. By product, IVD reagent posted revenue growth of39.37% YoY and medical equipment logged revenue growth of 6.24% YoY.

Growth in reagent segment driven by molecular diagnostics reagents

The IVD market can be divided into the following: immunologic diagnostics;biochemical diagnostics; and molecular diagnostics. The immunologic and biochemicaldiagnostics segments have almost reached a saturation point due to an early start andlow technical barriers. In H116, Kehua the integrated equipment/reagent marketingteams' quality resources to develop markets at multiple levels, with biochemical/ELISAreagent sales up 14%/8%. Meanwhile, the company has vigorously promoted thedevelopment of the molecular diagnostics segment and turned around last year'ssituation, in which delayed local nucleic acid blood screening tenders weighed onresults, leading to this segment rising 135% YoY.

Integration of acquired Italian firm ongoing

Kehua further promoted the consolidation of its Italian business in H116 and statedthat it will complete the registration and industrialization of acquired Italian TGS'srelated technologies and products in China as soon as possible. TGS has advantages inthe ToRCH and autoimmune disease diagnosis and treatment fields.

Valuation: Maintain Rmb13.31 price target and Sell rating

Our DCF-based price target of Rmb13.31 assumes a WACC of 8.5%. We maintain ourSell rating because Kehua mainly operates in mature segments of the IVD sector andeffects of the overseas acquisition have yet to be seen.