Tongce Medical (600763) 2018 Annual Report Review: Continuous High Growth Promotes Stable Progress in and Out of the Province

Tongce Medical (600763) 2018 Annual Report Review: Continuous High Growth Promotes Stable Progress in and Out of the Province
This report reads: The volume and price of oral medical services continue to rise, the company’s newly built dental hospital has completed its growth period and entered a rapid growth period. Dandelion plans to comprehensively promote the expansion and improvement of the province, high-growth progress continues, and the growth rate remains unchanged. Investment Highlights: Maintain Overweight rating.The company’s early training hospital has entered a period of rapid development, and the EPS for 2019/2020 is raised to 1.40/1.85 yuan (was 1).34/1.75 yuan), forecast EPS 2 in 2021.38 yuan, referring to comparable companies raised their target price to 84.0 yuan,杭州桑拿 corresponding to the 2019 PE 60 X, maintaining the overweight level. The performance was in line with expectations and profitability improved.The company achieved revenue of 15 in 2018.4.6 billion (+31.05%), net profit attributable to mother 3.3.2 billion (+53.34%), deducting non-net profit3.2.7 billion (+53.56%), and performance was in line with expectations.The company adheres to the platform strategy, scale effect reduces costs, profitability has improved significantly, and gross profit margin and net profit margin increased in 20181.83pp and 4.01pp. Dental medical services continued to expand, with steady growth in performance.The development model of the company’s regional headquarters + branches has become increasingly mature, and its business outlets have expanded year by year. The steady increase in the contribution of regional branches has led to steady growth in performance.Benefiting from consumption upgrades, planting, orthodontics, and pediatrics all maintained 35% + high-speed growth.The remaining capacity of Hangkou dental chair capacity is released; Ningkou is expected to enter a new round of development with the expansion of the new hospital in the future; Haining and other early-stage cultivation hospitals have entered a rapid growth period; Shaoxing Yuecheng and Ningbo Beilun Branches have passed the cultivation in 2018This period will turn around, and the high growth trend of oral medical services is expected to continue. The expansion inside and outside the province has been progressing steadily, and new cultivation points have been continuously cultivated.The company comprehensively promotes the dandelion plan. It plans to set up 100 branches in the province within 3-5 years. In 2019, it is expected that 10 dental hospitals will be opened, and another 10-15 will begin to build, which will help the province’s market expansion and further increase.The company has set up six “Cunji” dental hospitals across the country through the dental fund, and is committed to replicating the Hangkou model to break through geographical restrictions and achieve expansion.In addition, the assisted reproductive business is on track and strategically deploys ophthalmic medical services (Zhejiang University Eye Hospital plans to open in summer 2019) to help the company achieve leapfrog development. Risk warning: Assisted reproductive development exceeds expectations; oral services out-of-site expansion exceeds expectations.