Jinyu Medical (603882): Focus on the main business, and lay a long-term leader in medical diagnosis

Jinyu Medical (603882): Focus on the main business, and lay a long-term leader in medical diagnosis
Key points of investment: Credibility and scale effects are the core competitiveness of third-party testing. We judge that backward small production capacity will eventually withdraw.Because of the scale effect of credibility and centralized procurement, the concentration of overseas third-party inspection industries is relatively high.We believe that China’s third-party medical tests will not be an exception. In order to avoid potential medical disputes, orders will be concentrated on leading companies with more credibility. We judge that the ICL industry will quit small production capacity within three years.  High R & D focuses on long-term benefits, and the short-term performance is high in gold.The company’s research and development costs have been higher than other companies in the industry for a long time, and even exceed precision medical leading companies such as BGI and Berry Gene.R & D is mainly used for the development of LDT projects, and is the leading field within the company in the subdivisions such as liquid biopsy, chromatography and mass spectrometry.Assuming the company has no forward-looking high R & D investment, we expect the company’s net profit to exceed 500 million in 2019, and the PE is estimated to be about 25 times.Under the high R & D funding, the company’s performance has a higher gold content, and at the same time, a deeper moat has been established.  The key to the new medical reform is the decentralization of hospitals. Investment in the ICL industry can hedge policy risks.The starting point of the new round of medical reform is to control expenses and increase efficiency, cut off the internal interest chain of the hospital, and separate out the gray areas that are easy to breed power for rent-seeking.Hospital decentralization.We believe that the more thorough the implementation 合肥夜网 of the medical insurance control fee policy, the stronger the hospital ‘s motivation to package out the inspection department, the penetration of the ICL industry, and the investment in the “ICL” industry can hedge some of the risks of medical insurance control fees.  Large companies with small market capitalization, grafted on global advanced technology based on channel advantages, and provided a buy rating for the first time.The company adheres to the development idea of “stand up to the sky” and currently provides services to more than 22,000 medical institutions across the country, while grafting advanced global technologies based on channel advantages.The company is the most focused company in the industry. We believe that the difference between the company and other segments is growing, and the company’s segmentation 都市夜网 in the industry does not match the current market value.We estimate that the company’s net profit attributable to the parent will be 2 in 2018-2020.28, 2.87, 3.76 trillion, the first coverage given a buy rating.  Risk warning: ICL industry competition is further intensified.