Shulou(Shulou.com)11/24 Report--

August 22, the domestic medical imaging equipment "Big Mac" Joint Picture Medical, officially landed on the pioneering board of the department.

United Pictures Medical (stock code: 688271) issued at 109.88 yuan per share, with a price-to-earnings ratio of 77.69 times, up 54.81% to 170.11 yuan per share at the start of trading. This afternoon, its share price was 182 yuan per share, with a total market capitalization of 150 billion yuan, ranking among the top three in the total market capitalization of Science and Technology Innovation Board, second only to Jingke Energy and Trina Solar.

The domestic medical imaging brand, established in 2011, intends to wrestle with international giants such as Siemens Medical, GE Medical and Philips Medical.

In the past, the market of high-end medical imaging equipment in China has been monopolized by foreign enterprises for a long time. In the market of high-end PET / CT, MR and CT, the market share of imported brands once exceeded 90%. However, in the past decade, with the development of domestic medical imaging technology, the import substitution trend of domestic brands is becoming more and more obvious. Among them, Lianying Medical has come to the fore with a number of "domestic first" high-end medical imaging equipment products.

In the past three years, Lianyu Medical has accumulated revenue of about 16 billion yuan. Benefiting from the growth of demand for medical imaging equipment caused by COVID-19 's epidemic situation, the net profit of Lianyu Medical reached 1.4 billion yuan in 2021.

In the first half of this year, the company expects to achieve revenue of 374.2billion yuan and net profit of 745,874 million yuan. It is worth mentioning that Shanghai Lianhe, the second largest shareholder of United Pictures Medical, is an investment platform under the Shanghai State-owned assets Supervision and Administration Commission, with a shareholding ratio of 18.64%.

This IPO, Joint Pictures Medical Plan raised 12.48 billion yuan to invest in the following projects:

01. The revenue in three years is nearly 16 billion yuan, and the net profit last year is 1.4 billion yuan. Medical imaging equipment is the market segment with the highest technical barriers in the medical device industry. In China, this industry has shown a long-term situation of low concentration and low share of domestic products in the middle and high-end market.

In recent years, with the progress of the overall R & D level of domestic medical equipment, the core technology of the product has been gradually conquered, coupled with the drive of pioneering scientific and technological achievements such as AI (artificial intelligence) and AR (reinforcement learning) telemedicine technology, some domestic enterprises have gradually achieved the goal of keeping pace with international brands through technological innovation.

Joint Pictures Medical is one of them.

According to the prospectus, its main products include high-performance medical imaging equipment, radiotherapy products, life science instruments and medical digital and intelligent solutions, and more than 80 products have been introduced to the market, many of which are the first in the industry or made in China.

In 2018, United Pictures Medical focused on its main business and spun off its smaller third-party imaging center and medical artificial intelligence business.

From 2019 to 2021, the annual revenue of Lianyu Medical was 2.979 billion yuan, 5.761 billion yuan and 7.254 billion yuan respectively, the compound growth rate of income was 56.03%, and the net profit was-48 million yuan, 937 million yuan and 1.404 billion yuan respectively.

Changes in revenue and net profit of United Pictures Medical in ▲ 2019-2021

It can be seen that its net profit has changed from negative to positive since 2020, and the trend has been rapid in the past two years. However, there may still be a question mark as to whether this trend can be maintained.

Prior to the outbreak of COVID-19, lung imaging examination through CT and mobile DR products became an important way for early diagnosis and differential diagnosis of novel coronavirus infection, promoting a large number of configuration requirements for this kind of equipment in medical institutions in a short time.

With the regular prevention and control of the epidemic situation of COVID-19 and the important progress made by COVID-19 vaccines and therapeutic drugs, nucleic acid testing and antigen testing have become the main means of COVID-19 epidemic detection, and the purchase demand for corresponding CT and DR products has weakened, coupled with the service life of this kind of equipment for 5-10 years, the overall market demand for follow-up is expected to decline, which may lead to a slowdown in the growth rate of Lianyu medical treatment.

It is also worth noting that in 2020 and 2021, the total profits were 1.155 billion yuan and 1.698 billion yuan respectively, and the proportion of government subsidies to the total profits was 30.11% and 25.83% respectively, which had a greater impact on the net profit.

As of March 31, 2022, the total assets of Lianyu Medical were 10.607 billion yuan, an increase of 2.37% over the end of last year, and the total liabilities were 5.268 billion yuan, down 1.14% from the end of last year.

02. It has settled in nearly 900 third-class first-class hospitals, and the new market share of a number of products. First, since the listing, the products of Lianyu Medical have been stationed in nearly 900 third-class first-class hospitals across the country. Among the top 50 medical institutions in the country, Lianyu Medical users reached 49.

Its product line covers magnetic resonance imaging system (MR) products, X-ray computed tomography system (CT) products, X-ray imaging system (XR) products, molecular imaging system (MI) products and radiotherapy system (RT) products as well as life science instruments.

According to the number of newly added units in China in 2020, Lianying Medical's MR products ranked first in the domestic new market share, 1.5T and 3.0T MR ranked first and 3.0T MR ranked first, CT products ranked first in domestic new market share, CT ranked first under 64 rows, CT ranked fourth above 64 rows, and PET / CT and PET / MR products ranked first in domestic new market share. DR and Mobile DR products rank second and first in the new domestic market share respectively.

▲ China MR equipment market competition pattern (data source: hot knowledge consultation, according to the number of new units)

In the past three years, its main business income is mainly the sales of medical imaging equipment products, accounting for about 90%; the combined sales revenue of CT products, XR products and RT products accounted for 47.36%, 60.43% and 56.73% of the company's main business income, respectively.

▲ 's main business income is classified by product category.

The changes in the sales prices of the main products of Lianyu Medical are as follows:

It can be seen that the sales prices of XR products show a slight upward trend, while the sales prices of MR, CT and RT products rise at first and then decline, while the sales prices of MI products increase greatly, which is mainly affected by the launch of new high-end products in 2020.

The intelligent level of United Pictures Medical is in the leading position in the industry. It applies AI technology to scanning positioning, imaging and image post-processing to achieve functions such as one-click into bed, multi-protocol convenient planning, automatic post-processing, failure warning of key components, sleep and wake-up technology and so on. Related products have achieved intelligent scanning of the head, heart, spine, abdomen and other parts. Through the introduction of AI technology, Lianyu Medical's intelligent optical shuttle imaging platform technology can achieve the fastest imaging of the tested parts in a hundred seconds.

Although domestic brands have improved in technology and market in recent years, imported brands are still in a leading position in the market.

In addition to competing with international giants with brand, channel and technological advantages, United Pictures Medical also faces competition from domestic manufacturers such as Mindray Medical, Neusoft Medical, Wandong Medical and so on.

Comparison of ▲ Joint Pictures Medical Product Line with main participants in domestic and Foreign Market

In 2019-2021, the gross profit margin of the main business of Lianyu Medical was 42.06%, 48.81% and 49.71% respectively, and the gross profit margin of the main business increased steadily.

▲ comparable gross profit margin of companies in the same industry

From the comparison with peer gross profit margin, its gross profit margin is relatively close to Wandong Medical, due to different subdivided products, gross profit margin is lower than Mindray Medical, overall in line with the industry level.

03. The technology barrier is very strong. Last year, the R & D technical barrier of high-end medical equipment invested more than 1 billion yuan in R & D is extremely high, which is an interdisciplinary, knowledge-intensive and innovation-intensive industry.

The research and development of a device often involves biomedical engineering, machinery, algorithms, electronic information, material science, medical imaging technology and many other disciplines. This puts forward high requirements for the technical background of the core team.

According to the prospectus, Lianying Medical has a total of 10 core technical personnel, including experts in MR, CT, XR, MI and other fields. They graduated from Shanghai Jiaotong University, Fudan, Peking University, Tsinghua University, Harbin University of Technology and other well-known universities majoring in biomedical engineering, nuclear electronics, nuclear physics, mechanics, engineering physics, communication engineering and other hard science and technology.

Among them, Zhang Qiang, chairman, general manager and CEO of United Pictures Medical, once led the industrialization of the first 3.0T superconducting magnetic resonance system and other products made in China. Born in 1969, Benshuo majored in biomedical engineering at Shanghai Jiaotong University and went to the United States in 1996 to study for his doctorate in biomedical engineering from case Western Reserve University. he has worked in Shanghai Jiaotong University, the Shanghai office of Youli Systems, Siemens Medical Systems, and the Shanghai branch of Siemens (China) Co., Ltd.

HONGDI LI, Senior Vice President and Chief Technology Officer of United Pictures Medical, both majored in Nuclear Electronics at the University of Science and Technology of China, and is a well-known expert in the field of PET molecular imaging. He has participated in several high-definition PET projects of the National Institutes of Health at the Anderson Cancer Center of the University of Texas, and has successively worked at the University of Science and Technology of Hong Kong, China and the Anderson Cancer Center of the University of Texas.

Due to the long R & D cycle of large-scale high-end medical equipment, R & D investment is large. From 2019 to 2021, the R & D investment of Lianyu Medical reached 690 million yuan, 850 million yuan and 1.048 billion yuan respectively, accounting for 23.17%, 14.76% and 14.45% of revenue, respectively.

Compared with the world's leading medical device companies, Medtronic invested US $2.493 billion in R & D in fiscal 2020, accounting for 8.3% of that year's sales; Philips Healthcare invested US $2.181 billion in R & D in 2020, accounting for 9.1% of that year's sales; Abbott invested US $2.363 billion in R & D in 2020, accounting for 6.8% of that year's sales.

At present, the R & D department of Lianyu Medical mainly includes six departments: product Line Division, Public parts Division, Medical Software Division, Medical Power components Division, U + Division and Future lab.

It has more than 2000 R & D personnel, accounting for more than 35% of the company's total employees; more than 1900 have master's or doctoral degrees, and more than 1900 have overseas education background or work experience.

In terms of patents, Liangying Medical has obtained more than 1200 domestic invention patents and more than 400 overseas invention patents, and has taken the lead in undertaking nearly 40 national and provincial R & D projects, including nearly 20 major national science and technology projects.

04. There is no sales to a single customer accounted for more than 50% of revenue during the reporting period, the company's top five customers are as follows, there is no situation in which the proportion of sales to a single customer exceeds 50% of revenue or relies heavily on a small number of customers.

During the reporting period, the details of the company's top five suppliers are as follows:

At present, core components such as ball tubes and high voltage generators for CT products, X-ray tubes, high voltage generators and flat panel detectors for XR products, and magnetrons for RT products are mainly purchased.

The suppliers of the above core components include overseas suppliers such as Wanruishi, Philips, Canon, Spellman Electronic Technology (Suzhou Industrial Park) Co., Ltd., and their domestic subsidiaries. It also includes Shanghai Yirui Optoelectronics Technology Co., Ltd., Suzhou Bode Electric Co., Ltd., and other domestic suppliers.

05. United Pictures Group holding, Xue Min as the actual controller, as of the date of signing of the prospectus, the shareholding structure of United Pictures Medical is as follows:

The controlling shareholder of United Pictures Medical is United Pictures Group, and the actual control is Xue Min, the current chairman of United Pictures Group.

Xue Min was born in 1961, graduated from Wuhan Institute of Physics, Chinese Academy of Sciences, studied and worked abroad in 1988, returned to China in 1998 and founded Shenzhen Medet instrument Co., Ltd. since then, he has been engaged in R & D, management and consulting in the medical equipment industry.

Joint Pictures Medical has a total of 24 holding subsidiaries (including 10 domestic companies and 14 overseas companies), 4 shareholding companies, 3 branches, and 2 private non-enterprise units.

United Pictures Medical has a total of 9 directors.

Its senior management staff is a total of 12.

During the reporting period, the total remuneration of the directors, supervisors, senior managers and core technical personnel of Lianyu Medical Group accounted for the total profits of the company in each period as follows:

The income (including tax) received by these personnel from United Pictures Medical and its associated enterprises in 2021 is as follows:

06. Conclusion: the process of domestic substitution for medical imaging equipment is accelerating in recent years, building a "healthy China" has become a national strategy, and China's big health market is expanding rapidly. factors such as the increase in support for the high-end medical imaging industry and the normalization of COVID-19 epidemic prevention and control are all promoting the potential demand for medical imaging equipment, and the market share of domestic brands is also growing.

With the continuous improvement of the independent R & D and innovation level of domestic medical imaging equipment, domestic enterprises gradually break through technical barriers, the pace of domestic substitution is expected to accelerate in the future, and the product structure is upgraded from low-end to high-end or even ultra-high-end. Take XR as an example, many domestic manufacturers have mastered the production of core components such as flat panel detectors, high voltage generators and X-ray tubes, as well as key imaging technologies.

Driven by favorable policies, China is expected to usher in a new stage of prosperity of domestic medical equipment, and domestic leading enterprises will enjoy the double dividend of rapid growth of the industry and import substitution.

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