Enigma Of 20 Times Of Rise In Industrial Medical: The Performance And Share Price Soared, But Few Funds Held Heavy Positions. Why Are Bull Stocks So Controversial?

After releasing an earnings forecast of nearly 40 times of profit, the stock price of the "Bull Stock", which soared more than 20 times in a year, fell into a period of turbulence, and the long short game became increasingly fierce.

In the past year, BCE medical is expected to make a profit of 6.8-7.3 billion yuan, an increase of 3713.45% - 3993.85% over the same period of the previous year. It is estimated that the non net profit will be 6.81 billion yuan - 7.31 billion yuan, with an increase of 3929.22% - 4225.05% over the same period of last year.

On January 25, the day after the announcement of the performance forecast for 2020, the stock price of enko medical fell into violent fluctuation, which opened at a price lower than 5.74% of the previous trading day. Then, it fluctuated all the way, and finally closed at 298.50 yuan / share, with an amplitude of 11.70% in the whole day, and the total transaction amount was 5.199 billion yuan. On January 26, the game continued, and the share price of enko medical fell 2.15% again, and fell 4.58% by the end of the day.

According to the data of tonghuashun, on January 26, the net outflow of main funds of Yingke Medical Co., Ltd. was 275 million yuan. In the past three days, the net outflow of main funds of Yingke medical reached 290 million yuan.

Behind a lot of market sentiment, the controversy that interweaves in the sky of British Medical has never stopped. As the biggest beneficiary of the epidemic, the share price of Enke medical has soared 20 times in the past year, but so far, its price earnings ratio is still only 22 times, which is particularly "cheap" among a large number of pharmaceutical stocks.

Contrary to the soaring share price, the 21st century economic report combs wind data and finds that, as of 2020, of the 4426 equity funds, most of the public funds, except for 55 vertical funds, have not added enko medical into the list of heavy positions.

In this series of seemingly contradictory phenomena, the three most controversial mysteries of "Bull Stock" British Medical also "surfaced" - who is the biggest driving force behind the 20 times soaring of British Medical? Why does the public offering fund turn a blind eye to it? In the case of uncertain development of the epidemic situation, can the soaring myth of British medical treatment continue?

"Epidemic benefit stocks" soaring 20 times

The outbreak of new pneumonia in early 2020 will bring changes to the global political and economic environment, which is undoubtedly subversive. Travel, tourism, hotel, entertainment, retail, aviation and automobile industries have suffered heavy losses, but the expansion of medicine, Internet and other fields has accelerated. The "king of shares" medical care is undoubtedly the most typical beneficiary of the new crown epidemic.

According to the public data, the main business of Yingke medical covers four parts: medical protection, rehabilitation care, health care and inspection consumables. Its main products include disposable gloves, wheelchair, cold and hot compress, electrode pieces, etc., among which, PVC gloves, nitrile gloves and other medical protection categories account for the largest part of its income.

Before the outbreak of new crown pneumonia, the global disposable gloves Market maintained an annual growth of about 7-8%. The production capacity of the industry was mainly concentrated in Malaysia, and the leading enterprises included top gloves, hetega and Keshan rubber.

According to the data of Guosheng securities, the global market share of top gloves will be about 20% in 2019, and hetega, the second largest, is 10.9%. Meanwhile, domestic enterprises, industrial medical and blue sail medical market share are 5.7%.

On July 21, 2017, as an enterprise with "limited growth space" and no prominent dominant position in the industry, Enke medical was in a state of no interest for more than two years before its listing. At the end of 2019, the share price of Enke medical was only 11 yuan / share, and the total market value was less than 4 billion yuan. In the meantime, the performance of British Medical is not warm or hot, and there is no bright spot.

In the year of listing in 2017, the operating revenue of Enke medical increased by 47.96% year-on-year, the highest growth rate in history. The net profit attributable to the parent company exceeded RMB 100 million for the first time in the same period, reaching RMB 145 million, with a growth rate of 68.61%. However, since 2018, the company's revenue and profit growth have both declined. In 2019, the operating revenue was 2.083 billion yuan, only increasing by 10%. The net profit attributable to the parent decreased by 0.57% to 178 million yuan.

But the sudden outbreak of new crown pneumonia, but let the "ordinary" A-share "small transparency" ushered in high light moment.

Affected by the epidemic situation, many enterprises in Malaysia are facing multiple impacts, such as production and export, and many orders are transferred to China. For example, in November last year, Malaysia's Top Glove Companies suspended the operation of 16 factories located in Malaysia due to the surge of confirmed cases, and the output of another 12 factories has been greatly reduced.

Under the influence of multiple factors, such as the stimulation of epidemic situation and giant production suspension, the global demand for disposable gloves soared and the prices soared.

According to the report of the U.S. supply chain task force, the average monthly demand for nitrile gloves from March to July 2020 is about 9 billion, about three times that before the epidemic (the average monthly demand from December 2019 to February 2020 is less than 3 billion).

In addition, the domestic output of medical inspection gloves (medical nitrile gloves) from April to September 2020 was 15 billion, which was 116% higher than that of the same period in 2019, with a year-on-year increase of 116%. The price of medical inspection gloves (medical nitrile gloves) increased from 0.22 yuan / piece before the epidemic to 0.6 yuan / piece (price in September 2020), and the price is still in the rising channel.

Earlier, Enke medical said in public that due to the epidemic situation, the supply and demand of disposable gloves in the world is still seriously unbalanced. The company's PVC gloves and nitrile gloves products have been in a state of full production and sales, and some customer orders have been scheduled to the second quarter of this year.

At this stage, domestic medical protection materials related listed companies have ushered in a round of rising climax, but the highest increase is also in the British Medical.

According to the statistics of 21st century economic report, in 2020, the stock price of Enke medical increased by 1428.06%, ranking the highest among a shares. Compared with the new shares listed in 2020, it is not inferior (the other three stocks with annual increase ranking under the industrial medical group are all new stocks listed in 2020).

In 2021, the share price of enko Medical Co., Ltd. continued to soar. As of January 26, the stock price of Enke medical increased by 64.45%. On January 22, the total market value of Enke medical broke through the 100 billion mark.

In a large number of epidemic prevention materials, why did the British medical company, which is only located in the glove industry, achieve such a large share price rise?

Its loyal supporter snowball big V "patch on the moon" (snowball nickname) believes that, unlike the mask industry with high frequency words but low barriers, the glove industry has obvious three high attributes: high consumption frequency, high growth and high competition barriers. The high barriers are mainly reflected in the characteristics of "long production cycle, high risk of price decline", "high technical difficulty, high risk of loss after the epidemic situation", "scarcity of production factors, and extremely difficult to obtain indicators such as coal and cogeneration".

In addition, unlike the mask production line, which can be constructed temporarily by the manufacturing enterprise, the production cycle of disposable gloves generally takes 12-18 months.

In the competition pattern of the glove industry in China, lanfan medical, which has the ability to compete with Enke medical, is suffering from the disorderly expansion and high reputation in the early days, and is faced with great uncertainty. However, in the process of "gambling type expansion" many years ago, Yingke medical has achieved large-scale capacity accumulation and technical improvement.

On January 14 this year, in response to investors' questions, Enke medical said: "by the end of 2020, the annual total production capacity of disposable protective gloves of the company has reached 36 billion, including about 24 billion PVC gloves and 12 billion nitrile gloves."

Performance soared 40 times, but still failed to meet expectations?

In fact, whether from the performance growth rate or the absolute value scale, the performance forecast of British Medical is beautiful.

A total of 1469 performance forecasts have been disclosed in the A-share market by 21st century economic reporter. Among them, the top five net profit growth (lower limit) are Shengxiang biological (6375%), Jinghua new materials (4296%), Jiangsu Sopu (4180.06%), Tianci materials (3882.84%) and Yingke medical (3713.45%), which are mainly concentrated in the fields of epidemic benefit shares and new energy vehicles.

However, in absolute terms, the net profit scale of 8.8-7.3 billion yuan of industrial medical is far more than that of the other four enterprises.

According to the introduction of enko medical, the reason for the substantial increase in performance was due to the impact of the new crown epidemic, the global demand for disposable protective gloves increased sharply, resulting in the sharp increase in the company's glove product prices; the company's Anhui production base has successively put into production PVC gloves production lines and nitrile gloves production lines, with capacity expansion and technology improvement, reducing production costs, leading to the increase of gross profit margin; the United States is exempt from medical products Import duties, etc.

However, it is such a surge in performance forecasts, but triggered the company's share price shock.

In the eyes of long-term tracking investors, the performance of the company did not exceed expectations, or even lower than some investors expected.

Earlier, Du Youyuan, the chief analyst of open source securities, who was the first to pay attention to industrial medical, had predicted in a research paper that the net profit of Enke medical in 2020 would be 7.53 billion yuan. In the first quarter of 2021, it is expected to become the world's largest supplier of non natural rubber gloves, and its production capacity is expected to exceed 150 billion in three years, becoming the industry leader by leaps and bounds.

The performance forecast of the company is obviously lower than the analysts' expectations.

On the evening of January 25, "patch on the moon" also said bluntly in the live broadcast that the performance of British Medical in the fourth quarter of 2020 was lower than its expectation.

In this regard, the industrial medical announcement shows that the rise of raw material prices and the appreciation of RMB against the US dollar during the reporting period have a certain inhibitory effect on the company's performance. This may be one of the reasons for the lower than expected performance.

The reporter inquired the data of Zhuo Chuang plastics and found that by the end of 2020, the average price of PVC paste resin, the main raw material of disposable gloves, increased by 69.96% compared with that in 2019, of which the average price of glove material was 16265 yuan / ton, which was 96.65% higher than that in 2019.

At the same time, nitrile rubber latex, the raw material of nitrile gloves, also rose sharply. According to the data disclosed by the listed company Qi xiangtengda, the price of NBR latex will be about 25000 yuan / ton in December 2020, about 5-6 times of the average price before the epidemic.

In addition, the appreciation of RMB also has a great impact on the company's performance as its medical products are mainly sold to overseas markets such as the United States. Since last year, the exchange rate of RMB against the US dollar has risen from the lowest point of 7.15 in May 2020 to around 6.5 at the end of the year, with an appreciation rate of 10%.

"Patch on the moon" pointed out that the main reason why the performance of the fourth quarter of the company was lower than its expectation was due to the exchange rate and shipping. It is normal that the exchange rate has an impact on the company's profits of 200 million yuan. In addition, it is also related to shipping. All of the products of Enke medical are exported by sea. However, before shipping, they need to be packed first. However, there is a serious shortage of containers. This may make the profits of enko medical for one to two weeks until the first quarter of 2021. "

However, as for the actual impact of exchange rate and raw material prices on the company's performance, as of the deadline, the reporter could not get a response from the company.

If the exchange rate and other factors are only short-term factors to inhibit the development of British medical, then for many institutional investors, the uncertainty of the development of the new crown epidemic is the sword of Damocles hanging on the head of British Medical. If the epidemic situation is alleviated, it is still uncertain whether the company can achieve high growth rate or even maintain the performance of its current scale.

"If the epidemic is over after 2022, the sales of gloves will also drop, and the company's net profit may also be reversed. The explosive growth of net profit is not sustainable." A researcher from a state-owned financial institution in South China pointed out in an interview.

The 21st century economic report reporter found that the uncertainty of the epidemic situation is the main reason for many institutional investors to flinch from British Medical.

After more than 20 times of stock price rise, as of the evening of January 26, the dynamic P / E ratio of industrial medical is still only 22 times, which is the lowest in the top 20 bull stocks list (excluding new shares) in 2020, and it is also far lower than the average p / E ratio of wind healthcare equipment and supplies industry, which is 64.26 times.

At the same time, of the 4426 equity funds that have published the fourth quarter report of 2020, only 55 funds have the top 10 major positions, most of which are vertical funds in the pharmaceutical industry, and the number of positions is not higher.

Before BCE medical, 151 stocks were heavily held by public offering funds more frequently than by Enke medical, and 44 stocks were listed in the top 10 heavy positions by the public offering funds more than 200 times.

China Europe medical health a, which holds the most shares of Enke healthcare, holds 7.7338 million shares, accounting for 2.20% of the company's total shares. However, Enke medical is only the sixth largest enterprise in the company. The fund also holds positions in many pharmaceutical leading enterprises such as Aier Ophthalmology, yaomingkant, Hengrui medicine, tiger medicine, Zhifei biology, etc.

However, during the period of continuous rise in 2020, Yingke Medical Co., Ltd. has been on the dragon and tiger list for 16 times. Although institutional seats have been listed in the top five trading seats for many times, 21st century economic reporter has noticed that since the second half of the year, the activity of the institutions has decreased significantly.

According to the data, in the past year, institutional seats have been listed 34 times, including 18 times of buying, accumulated net buying of 543 million yuan, 16 times of selling and accumulated net selling of 472 million yuan. However, the list was mainly concentrated in the first half of last year, only 8 times in the second half of last year, and no institution was listed after November 9, 2020.

Will there be excess capacity?

It is worth mentioning that at a time when the voice of market doubts is growing, the expansion plan of British Medical is vigorously promoted.

The 21st century business reporter noted that since its listing, the company has been actively launching the expansion plan. After the outbreak of the epidemic, the company's pace of expansion is further accelerated.

In March 2020, Yingke medical announced that it would invest 27.168 billion pieces (27.44 million boxes) of high-end medical gloves in Pengze County, Jiangxi Province, with a total investment of 3 billion yuan;

In June, Yingke medical announced to invest in the construction of an annual output of 16 billion high-end medical gloves (16 million boxes) in Huaining County, Anhui Province, with a total planned investment of 1.5 billion yuan;

In August, the company announced a total investment of 1.5 billion yuan for the annual production of 16 billion high-end medical gloves (16 million boxes); in September, the company invested 5 billion yuan in two projects, including an annual output of 40 billion pieces (40 million boxes) of high-end medical gloves;

In December, Yingke medical planned to invest in the project of annual output of 50 billion pieces (50 million boxes) of nitrile and PVC high-end medical protective gloves, with a total investment of 953 million yuan; at the same time, it announced to invest in the construction of a project with an annual output of 5 billion TPE gloves and 5 billion CPE gloves, with a total investment of 120 million US dollars;

On December 30, Yingke medical announced that the board of directors had deliberated and passed the "proposal on establishing a wholly-owned subsidiary in Xiayi county to implement the project of annual production of 13.1 billion PVC high-end medical gloves (13.1 million boxes), and the registered capital of the subsidiary was 50 million yuan.

On January 21, 2021, the International Department of China Securities Regulatory Commission (CSRC) also disclosed the approval materials of overseas IPO shares (including common shares, preferred shares and other stocks and stock derivative forms) submitted by Yingke medical. Once accepted, it means that the company will soon be able to submit its prospectus on the Hong Kong stock exchange.

In the eyes of some market participants, this series of expansion behaviors are the measures taken by British Medical to take advantage of the epidemic situation to overtake and become the world's largest supplier of PVC gloves.

Kaiyuan Securities Research Report has predicted that, with the advantages of domestic industrial support, land, labor and other advantages, it will accelerate the expansion of production capacity. It is conservatively predicted that the production capacity will reach 35.2 billion, 74.4 billion and 110.4 billion respectively from 2020 to 2022. It is expected to become the world's largest supplier of PVC gloves in 2021 and the world's largest supplier of nitrile gloves in two years.

However, there are also market participants worried about its expansion prospects.

A private equity researcher in South China pointed out: "if the new coronavirus vaccine comes on the market in the future and the epidemic situation improves, will these projects put into production one after another, will there be overcapacity? After the end of the epidemic, can the price and gross profit rate of the company's protective equipment increase steadily

However, in the view of another pharmaceutical investor in Shanghai, risk also means opportunity. "The fundamentals of BCE are still good, which may not be understood by laymen or think that the short-term rise is too high. Now the supply of products is in short supply. Of course, it is necessary to expand the production capacity. Once the production capacity is formed, it will lay a leading position. The company may not be at risk after the end of the epidemic. There are many possibilities for the future production capacity. It may be that nitrile gloves will replace the original latex gloves; enko may replace the share of the Malaysian glove factory; and the application field of gloves can also be expanded. "

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