Recently, many companies have released their quarterly reports one after another. Today, I will focus on a few companies that I usually pay attention to.
(1) Mindray Medical – as expected
Mindray Medical is a company I am very optimistic about , and it is also a veritable leader in the domestic medical device field. It has a very solid leadership position in the three fields of life information and support, in vitro diagnosis and medical imaging.
But last year, Mindray Medical’s stock price fell sharply, from a high of 500 yuan to below 300 yuan , ending a three-year bull market.
Last year, Mindray Medical’s revenue was 25.27 billion, a year-on-year increase of 20.2%, and its net profit was 8 billion, a year-on-year increase of 20.2% .
Overall, although the performance was slightly lower than expected, it was not very bad in the year of the epidemic.
The performance of Mindray Medical in the first quarter of this year also came out, with revenue of 6.94 billion, a year-on-year increase of 20.1%, and net profit of 2.11 billion, a year-on-year increase of 22.7%.
I think this performance is completely in line with expectations , and even slightly exceeded expectations.
The entire pharmaceutical industry fell sharply last year, but compared with other companies, I think Mindray Medical’s decline is somewhat unjust.
In the past 5 years, Mindray Medical’s revenue has maintained steady growth . From 2017 to 2021, Mindray Medical’s year-on-year revenue growth rate was around 20% to 23% except for 2020, which was 27% higher.
The revenue of Mindray Medical is very stable. The only regret is that the growth rate of net profit continues to decline . In 2017, the growth rate of Mindray Medical’s net profit was 62%, and the growth rate in the first quarter of 2021 and 2022 fell to 20%+ .
Overall, I think Mindray Medical has been able to maintain stable growth in the past two years.
The decline in the net profit of Mindray Medical will have a certain impact on the stock price, but I am still optimistic about the future of Mindray Medical.
(2) China Merchants Bank – in line with expectations
China Merchants Bank has made a lot of noise recently because its president was arrested, but this does not affect the company’s quality at all.
In the first quarter of this year, China Merchants Bank’s revenue was 91.99 billion yuan, an increase of 8.5% year-on-year, and its net profit was 36.02 billion yuan, a year-on-year increase of 12.5%, which is perfect.
China Merchants Bank’s performance has been stable, and I like the company, but the stock price of China Merchants Bank may also be affected by turbulent news from management recently.
If it falls too much, for example, the valuation falls below 7 times, I think friends who want to deploy banks can consider China Merchants Bank.
(3) Oriental Fortune – in line with expectations
The first quarterly report of Oriental Fortune finally came out. After falling so much, I have to give an explanation.
In the first quarter of this year, Oriental Fortune’s revenue was 3.2 billion, a year-on-year increase of 10.6%, and its net profit was 2.17 billion, a year-on-year increase of 13.6%, fully in line with expectations.
Why is the growth rate of Dongcai so low? I also said that it was in line with expectations.
Show you the data.
In 2018, the revenue was 3.10 billion, a year-on-year increase of 22.6%; the net profit was 960 million, a year-on-year increase of 50.5%;
In 2019, the revenue was 4.23 billion, a year-on-year increase of 35.5%; the net profit was 1.93 billion, a year-on-year increase of 91.0%;
In 2020, the revenue was 8.24 billion, a year-on-year increase of 94.5%; the net profit was 4.78 billion, a year-on-year increase of 160.9%;
In 2021, revenue will be 13.09 billion, a year-on-year increase of 58.9%; net profit will be 8.55 billion, a year-on-year increase of 79.0%.
Dongcai has doubled its net profit by about 9 times in three years , and it is too difficult to continue its rapid growth. If it can maintain a double-digit growth rate this year, I think it will exceed expectations .
Everyone knows how bad the stock market was in the first quarter of this year. Whether it is the stock market turnover or fund sales, the first quarter of this year was far worse than last year, but Dongcai still maintained double-digit growth, which I think is very rare.
Although Dongcai has also fallen a lot in this wave, I think it is killing valuations, not logic . All growth stocks are facing this problem.
If Dongcai can maintain double-digit growth this year, and its valuation is around 35 times, I think it is acceptable. When the next bull market comes, Dongcai will still be the king of brokerages.
(4) Hengrui Medicine – lower than expected
Hengrui Medicine is one of the rare big bull stocks in A-shares , but since last year, it has continued to plummet, and its share price has halved.
Weak performance is the original sin.
Hengrui Medicine’s revenue in 2021 was 25.91 billion, a year-on-year decrease of 6.6%, and its net profit was 4.53 billion, a year-on-year decrease of 28.4% , which was the reason for the continued sharp decline last year.
However, this year Hengrui still did not get out of the quagmire. In the first quarter of this year, Hengrui’s revenue was 5.48 billion, a year-on-year decrease of 20.9%, and its net profit was 1.24 billion, a year-on-year decrease of 17.4% .
A company with a high valuation is most afraid of a performance reversal . If only the growth rate drops, Hengrui’s stock price will not be cut in half.
The main reason for the decline in Hengrui’s performance was centralized procurement . The price reduction was too severe, which directly led to a decline in the company’s gross profit margin. Last year, Hengrui’s main business gross profit margin was 85.6%, a decrease of 2.7 percentage points from the previous year.
In addition, Hengrui’s innovation and transformation has also entered the deep-water area, and R&D expenditures continue to rise . Last year, Hengrui’s cumulative R&D investment reached 6.2 billion , an increase of 1.21 billion over the previous year, and a year-on-year increase of 24.3%.
The emergence of two difficulties at the same time also led to the decline of Hengrui’s performance and the halving of the stock price.
Fortunately, Hengrui has increased investment in research and development. If Hengrui does not increase its research and development efforts in order to ensure profits, I feel that Hengrui is going downhill.
But Hengrui did not.
In the context of centralized procurement, if it stagnates, it will eventually become a very mediocre pharmaceutical company. At this time, only by researching and developing new drugs, using new products to drive the company’s profits, and becoming the second growth pole, can it continue to create brilliance.
Hengrui’s two years will be difficult, but Hengrui is still a high-quality company. I hope that Hengrui’s R&D investment can be rewarded as soon as possible, so that the decline cycle will end.
Today, I mainly comment on the quarterly reports of Mindray Medical, China Merchants Bank, Oriental Fortune and Hengrui Medicine. These are also companies that I pay more attention to.
My personal investment philosophy pays more attention to the value of the company, so I basically don’t look at small, chaotic, and bad companies, because each garbage company has its own garbage, but high-quality companies always have similarities .
The recent stock price adjustment of many companies is not because the company is dying, but because the broader market is too weak and the mud and sand are falling.
At this time, it is even more necessary for us to have a discerning eye and grasp the investment opportunities of high-quality assets.
$ Mindray Medical (SZ300760)$ $ Oriental Fortune (SZ300059)$ $ Hengrui Medicine (SH600276)$ @Today’s topic @snowball creator center@ ETF star push officer
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