Runda Medical (603108) 2018 Annual Report Comments: Asset impairment loss drags down profit performance, cash flow is a signal of improved operating quality

Runda Medical (603108) 2018 Annual Report Comments: Asset impairment loss drags down profit performance, cash flow is a signal of improved operating quality

Event: The company announced its annual report and realized revenue of 59 in 18 years.

600 million (+38.

1%), net profit attributable to mother 2.

6.2 billion (+19.

5%), deducting non-attributed net profit 2.

5.5 billion (+15.


Realize EPS is 0.

45 yuan (+ 18%).

Realized operating net cash flow of 5.

3.9 billion.

The company’s profit was lower than our expectations and the market, but the operating net cash flow was significantly higher than expected.

Comments: The income maintained a rapid growth, Q4 profit was dragged down by the company’s 18 years of revenue 59 due to asset impairment losses.

$ 600 million, an increase of 38% previously, in line with our expectations (+ 39%).

The initial rapid growth of revenue: 1) The overall integrated services (collection and packaging) business has promoted endogenous rapid growth: the overall integrated services accounted for 30% of total revenue in 18 years, with each increase of 45%.Main contribution points; 2) 17 years of acquisition of the scale of the target consolidation and growth: 17 years of the company’s acquisition of Beijing Southeast, Changchun Jinze Rui, Wuhan Runda Shangjian, Wuhan Youke Liansheng and Yunnan Runda Kangtai and other companies, 17 yearsConsolidation time at 1?
Between 10 months; the 18-year merger and consolidation of the above-mentioned acquisition targets, ranking a total of 9 new income in 17 years.

85 million, equivalent to contributing 23pp revenue growth.

In terms of quarters, the company’s 18Q4 non-net profit 深圳桑拿网 deduction was 15.43 million yuan, which was 74% every 18%, which was much lower than the 18Q1 / 2/3 non-net profit deduction of 58.53 million, 85.37 million and 95.76 million yuan, mainly due to the increase of approximately 50 million assets in 18Q4Impairment losses include: 1) Long-term equity investment impairment losses: in response to expectations of performance outside China, resulting in accrual of 17.33 million; 2) goodwill impairment losses: Beijing Runnuosi automatic chemiluminescence detection equipment is delayed, resulting inThe 18-year performance did not meet expectations and accrued 14.08 million impairment losses on goodwill. 3) Bad debt losses: Prolonged accounts receivable turnover led to an increase of approximately 20 million yuan in bad debt losses.

The gross profit margin decreased slightly, and the company’s gross profit margin was 27 in 18Q4 with well-controlled expense ratios.

87%, zero for ten years.

8pp, ring than epoxy 0.

3pp is mainly due to the increase in the proportion of centralized mining and packaging and the decline in the proportion of high-margin agency business.

The company’s 18Q4 sales expense ratio was only 8.

1%, zero for one year.

7pp is mainly due to the decline in the sales expense ratio brought by the increase in the proportion of centralized packaging mode.

4Q18 management + R & D expenses7.

4%, zero for one year.

2pp, mainly due to the expansion of the scale to maintain stability and slightly decrease.

Budget for the fourth quarter of 2018 2.

9% for one year.

4pp, equivalent to 18Q1?
3 The financial expense ratio of high enterprises has decreased, mainly because the company exercised the redemption of “17 Runda 01” bonds, and the overall financial expenses decreased.

Overall, the company’s 18-year gross margin and period expense ratio are well controlled, and its profitability remains stable.

The operating net cash flow has clearly turned positive, showing that the company’s lean operating performance and the improvement of upstream bargaining power have significantly improved the company’s operating net cash flow, which is significantly higher than expected, and is the biggest operating highlight of the annual report.

Specifically, the improvement of the company’s operating cash flow mainly comes from: 1) the procurement informationization, the refinement level has improved, the inventory turnover rate has accelerated, and the company’s inventory turnover days have continued to decline in 18 years.

4 days to 91.

1 day; 2) Establish a new reward and punishment mechanism to strengthen the collection of receivables; 3) With the expansion of the scale of the collection and packaging business, continue to replace the pressure of bargaining upstream, and require more purchase receivables account period, 18 years companyAccounts payable turnover days increased by 15.
2 days to 47.

1 day.

The company made full use of the scale effect of the centralized mining and packaging model to improve operating cash flow.
Asset impairment losses drag down cumulative profit performance. Cash flow is a signal of improvement in operating quality. Asset impairment losses and M & A expansion (cancellation of additional acquisitions in 18 years) are taken into consideration. The company is downgraded by 19
The 20-year forecast EPS is zero.


83 yuan (was 0.

78 yuan / 1.

02 yuan), the new 21-year forecast EPS is 1.

02 yuan, the current price corresponds to 19?
The 21-year PE is 19/15/13 times.

Although asset impairment losses dragged down the company’s profit performance, impairment losses did not affect subsequent cash flow performance, and the company’s operating cash flow was significantly changed, which is also expected to improve the company’s operating quality.

Maintain “Buy” rating.

Risk reminder: The price of IVD consumables is lower than expected; the risk of goodwill impairment on the performance of the acquisition target is not up to the promise.