Under the changing face of opening medical performance, the historical operation is not good again, and there is the risk of impairment of goodwill

Kaikai medical (300633. SZ) is a medical device manufacturer. It officially entered the GEM market in 2017, with a market value of up to 19 billion yuan. < / P > < p > after listing, Kaikai medical did not achieve leapfrog development, on the contrary, it ushered in a big change in performance. The company’s core products were eroded by competitors, the market share continued to decline, and the performance continued to decline significantly, ushering in the dark moment since the listing. < / P > < p > after the opening of the medical listing, there were large-scale acquisitions, which paid a very high premium. However, the assets purchased by the company have failed to fulfill the performance commitment, the business prospect is also uncertain, and the book goodwill is subject to impairment risk. < p > < p > < p > recently, it announced a fixed increase of 1.2 billion yuan for the opening of medical care, which was in trouble, and once again extended its hand to the capital market. This is a listed company with poor historical operation, impairment risk of goodwill and crazy reduction of important shareholders. Will investors pay for this fixed increase? < / P > < p > the main business of the company is the independent R & D, production and sales of medical diagnosis and treatment equipment. The main products include medical ultrasonic diagnostic equipment (mainly color Doppler ultrasound diagnostic equipment and B-type ultrasonic diagnostic equipment), medical electronic endoscope equipment and consumables, blood analyzer, etc. < / P > < p > in April 2017, the company opened medical services and officially entered the GEM market. The IPO of the company raised 165 million yuan, and planned to invest in the construction of medical device industrial base, R & D Center reconstruction and expansion project, marketing network and brand construction project, and information construction project. The company’s prospectus is optimistic about the prospect of the raised investment project. However, just two years later, the performance of the company has changed a lot. In 2019, the company’s revenue was 1.254 billion yuan, with a year-on-year growth of 2.2%; the net profit was 102 million yuan, a year-on-year decrease of 59.81%. In the first half of 2020, the company’s performance continued to deteriorate significantly, with revenue decreasing by 10.72% to 486 million yuan and net profit decreasing by 65.2% to 25.21 million yuan. < / P > < p > from the revenue side, the company’s revenue growth in 2017 and 2018 was 37.49% and 24.04% respectively. In comparison, the company’s revenue will slow down significantly in 2019, and will decline significantly in 2020. The main reason behind this is that the company’s color Doppler ultrasound business income continues to decline. < / P > < p > Color Doppler ultrasound is the core source of income and profit for the establishment of medical treatment. In 2019, this business contributed 890 million yuan of revenue, accounting for 71.02% of the total revenue. Since 2019, this business has continued to decline, with a year-on-year decrease of 9.86% in 2019 and 17.76% in the first half of 2020. < p > < p > in this regard, according to the analysis of the Research Report of securities companies, the growth rate of color Doppler ultrasound industry will slow down in 2019, and the government’s financial expenditure and medical insurance control fee will have a greater impact on the growth of color Doppler ultrasound industry; in the first half of 2020, mainly due to the impact of the epidemic situation, the purchase of ultrasound equipment will be delayed. < / P > < p > the domestic ultrasonic diagnosis equipment market scale is 10 billion yuan. In the domestic market, there are two main types of competitors: one is the foreign-funded companies with strong R & D strength and manufacturing capacity, occupying a leading position in the market with core technology and advanced products, such as GE, Philips, Siemens, etc., which are mainly located in the high-end market; the other is the domestic large-scale medical ultrasonic diagnosis equipment enterprises which master certain core technologies Such companies, such as Mindray medical (300760. SZ), Kaikai medical, Shantou ultrasound, lippon instruments (300206. SZ), feiyinuo, etc. relying on the core technology independently developed, these companies have occupied the main share of the domestic low-end medical ultrasonic diagnostic equipment market after years of development, and their products have gradually extended to the high-end market. < p > < p > Mindray medical is the largest comprehensive medical device manufacturer in China. Its business includes life information and support products, in vitro diagnosis products and medical imaging products. In 2019, Mindray medical contributed 6.34 billion yuan, 5.814 billion yuan and 4.039 billion yuan respectively, accounting for 38.3%, 35.12% and 24.4% of business income respectively. Among them, color Doppler ultrasound accounts for about 90% of the medical imaging business. Therefore, the medical imaging business of Mindray medical can roughly reflect its color Doppler ultrasound business performance. < p > < p > financial report shows that in 2019 and the first half of 2020, Mindray medical imaging business increased by 12.3% and 6.67% respectively. The annual report of Mindray medical in 2019 also disclosed the product sales volume. The sales volume of color Doppler ultrasound products in that year increased by 12.99% to 23761 sets. < / P > < p > by comparison, we can find that the performance of Mindray medical is far better than that of the open medical service in the face of adverse external environment, and the market share of the opened medical service has been greatly eroded. Compared with the increasingly competitive core business of Mairui, Mairui has no advantage in the future. < p > < p > from the profit side, in the case of low income, the expenses for opening medical treatment are relatively rigid, which directly leads to a sharp decrease in net profit. The financial report shows that in 2019, the company’s sales expenses will increase by 15.51% to 407 million yuan, and the management expenses will increase by 20.48% to 73.45 million yuan, which is higher than the income growth of 2%; in the first half of 2020, the management expenses will increase by 12.57% to 36.46 million yuan, while the period revenue will decrease by 10.72%. As of June 30, 2020, the original book goodwill value of the medical treatment company has reached RMB 504 million, including RMB 335 million from the acquisition of Shanghai Wilson Photoelectric Instrument Co., Ltd. (hereinafter referred to as “Wilson”) and Shanghai Heyi Medical Instrument Co., Ltd. (hereinafter referred to as “Heyi medical”) and RMB 169 million from the acquisition of sonowise, Inc. < / P > < p > in August 2018, the company issued a notice saying that the company transferred 100% equity of Wilson and Heyi Medical Co., Ltd. held by Nanping Xuansheng and Nanjing Xuansheng with its own funds of 388 million yuan. Among them, the transaction price of Wilson acquisition was determined to be 369 million yuan, and the transaction price of Heyi medical was determined to be 19.4 million yuan. Wilson was founded in 1995, mainly engaged in the research, development, production and sales of soft endoscopic treatment instruments, including biopsy forceps, foreign body forceps, cell brushes, basket, snare device, three lumen tube, etc., which are used in the diagnosis and treatment of upper and lower digestive tract and respiratory tract; Heyi medical is a sales company under the same controller. < / P > < p > the products operated by Wilson and Heyi Medical Co., Ltd. belong to the field of endoscopic consumables. Endoscopic diagnosis and treatment technology is a clinical technology in which endoscopy (mainly including digestive endoscopy and respiratory endoscopy) is inserted into the natural lumen of the human body, and instruments are inserted through the endoscopic working pipe for inspection and treatment. It belongs to an important branch of minimally invasive medicine and is widely used in digestive tract and respiration The clinical diagnosis and treatment of the disease. < / P > < p > for this acquisition, the opening of healthcare paid a very high premium. According to the acquisition announcement, as of May 31, 2018, the net assets of Wilson and Heyi medical were 28.11 million yuan and 2.28 million yuan respectively, with a total net assets of 30.39 million yuan, and the corresponding acquisition of Pb was 13 times; in the whole year of 2017, the net profits of Wilson and Heyi medical were 16.92 million yuan and 260 thousand yuan respectively, the net profits of both were 17.18 million yuan and 23 times of PE acquisition. < / P > < p > under the high premium acquisition, the trading partner has given the performance commitment, and the net profits of Wilson and Heyi medical in 2018, 2019 and 2020 are no less than 24.5 million yuan, 29.4 million yuan and 35.29 million yuan respectively. < / P > < p > according to the annual report of medical treatment in 2018, the net profit of Wilson and Hechi Medical Co., Ltd. attributable to the shareholders of the parent company in 2018 was 25.08 million yuan, reaching the commitment of 24.5 million yuan, and completing 102.34% of the predicted profit of this year. Although the target company has completed its performance commitment in 2018, it is completely in line with the accurate target. < p > < p > it was disclosed in the annual report of medical services in 2019 that Wilson and Heyi Medical Co., Ltd. had a net profit of 24.76 million yuan in 2019, which failed to meet the performance commitment of 29.4 million yuan, and failed to fulfill the performance commitment of this year. The annual report explained that the reason for the failure to fulfill the performance commitment for the current year was that the sales performance did not meet the expectation, and the impact on the current goodwill impairment test was RMB 2008 million. In the first half of 2020, Wilson achieved a sales revenue of 20.87 million yuan, a year-on-year decrease of 45.49%, and a net profit of 3.93 million yuan, a year-on-year decrease of 65.81%. In the first half of 2020, Wilson only completed 11.14% of the annual net profit commitment. If the performance commitment can not be fulfilled in 2020, I am afraid that goodwill will continue to be impaired. < / P > < p > for the above transaction, the acquisition announcement once said that the purpose of this equity acquisition is to enrich the relevant supporting products in the field of endoscopic products of listed companies, expand into the field of endoscopic treatment devices, and play a synergistic role with endoscopic products, so as to better meet the overall needs of clinical departments. < / P > < p > in fact, Wilson and Yiyi medical are in a good track in the field of endoscopic consumables. At present, the market of endoscopic consumables in China is about 4.6 billion yuan. Colonoscopy and gastroscopy are important screening methods for cancer prevention, and the prevalence rate is high in developed countries and regions. The proportion of gastroscopy in Japan is three times that in China, and that in the United States is 5-6 times that in China. Compared with overseas, there is still a lot of room for improvement in the number of endoscopy diagnosis and treatment in China. < p > < p > in the field of endoscopic consumables, China is still mainly imported, and the main manufacturers include Boston science, cook and Olympus. However, under the engineer bonus, the market share of domestic brands will increase steadily, and the growth rate will be higher than that of the industry, and there is a huge space for domestic substitution. < p > < p > since Wilson and Ichi medical are in a good track, why have their performance been unsatisfactory in recent years? The biggest problem reflected behind this is that Wilson and onehealthcare do not have product competitiveness. The domestic brand manufacturers of endoscopic consumables mainly include Nanwei medical (688029. SH), Changzhou Jiuhong Medical Equipment Co., Ltd. and Anrui medical equipment (Hangzhou) Co., Ltd., among which Nanwei medicine is the leading domestic manufacturer. From the perspective of product layout, Nanwei medical products have rich gradients, including hemostasis, closure, biopsy and other common consumables, which continue to contribute to the main performance, and the high value-added consumables EMR / ESD rapid volume, as well as the potential heavyweight product eoct will be on the market soon. From 2017 to 2019, the revenue of Nanwei Medical Co., Ltd. increased from 641 million yuan to 1.307 billion yuan, and the net profit increased from 101 million yuan to 304 million yuan. < p > < p > in contrast, Wilson’s product layout is mainly concentrated in the field of common consumables. In 2019, the annual income is only 94.09 million yuan, which is only 7.2% of the income scale of Nanwei medical in that year. Can Wilson, who has no product and scale advantage, still share the dividend of localization of endoscopic consumables? < p > < p > in addition to Wilson and Heyi medical, the company also has a goodwill due to the acquisition of sonowise, Inc., with a book value of 169 million yuan. According to the financial report, the company’s revenue and net profit in 2018 were 8.52 million yuan and – 9.14 million yuan respectively, and the revenue and net profit in 2019 were 8.21 million yuan and – 6.32 million yuan respectively. There is no explanation for the continuous annual report of < sonop. At present, the company has made a provision for goodwill impairment of 76.92 million yuan for sonowise, Inc. < p > < p > < p > the company announced on the evening of September 30 that the company plans to raise no more than 1.2 billion yuan for color Doppler ultrasound / endoscope product research and development project, headquarters base construction project, Songshan Lake medical device production and research project, and supplementary working capital. For the prospect of the project, the fixed increase plan gives a very optimistic expectation. For example, regarding the opening of medical device production and research project in Songshan Lake, the announcement states that the total investment of the project is 585 million yuan, the construction period is 42 months, and the annual average sales revenue is expected to be in operation period after the project is put into operation