Benefiting from the continuous high growth of performance, Samsung Medical's secondary market performed well.
Du Pengwen. Since April 2022, Samsung Healthcare (601567SH) share price constantly **, from 732 yuan rose to 1992 yuan, the largest increase of 172% during the period, compared with the industry and the entire market to achieve significant excess returns. On December 12, the company's stock price closed at 1918 yuan shares, with a total market value of 27 billion yuan.
Samsung Medical's performance has achieved high growth in the past two years, and the dual main businesses of smart power distribution and medical services have performed well, but the company's continuous external premium acquisitions have formed a lot of goodwill, and the amount will reach 157.3 billion yuan.
High growth in performance
Since 2022, Samsung Healthcare's performance has continued to grow at a high rate, and the company's operating income in 2022 increased by 29% year-on-year55% to 909.8 billion yuan, net profit increased by 37% year-on-year4% to 94.8 billion yuan, deducting non-net profit increased by 103 year-on-year9% to 105.9 billion yuan. In the first three quarters of 2023, the company's operating income increased by 20% year-on-year81% to 833.8 billion yuan, net profit increased by 112 percent year-on-year27% to 148.9 billion yuan, deducting non-net profit increased by 57% year-on-year14% to 133.1 billion yuan.
Samsung Healthcare has three businesses, namely intelligent power distribution, medical services, and financial leasing, with operating income of 68 in 20220.9 billion yuan, 206.5 billion yuan and 65.28 million yuan, with gross profit margins of % respectively.
As the core revenue and profit of Samsung Healthcare, intelligent power distribution is the core driving force for its high growth.
In 2022, the company's intelligent power distribution business achieved an operating income of 680.9 billion yuan, a year-on-year increase of 265%, gross profit margin increased by 4 year-on-year56 percentage points to 2862%。According to the research report of Soochow, the company's intelligent power distribution and consumption will achieve a net profit of 7 in 20227.7 billion yuan, a year-on-year increase of 59%. According to the 2023 interim report, the company's intelligent power distribution segment achieved operating income of 426.1 billion yuan, a year-on-year increase of 224%, achieving a net profit of 75.1 billion yuan, a year-on-year increase of 17863%, contributing more than 85% of the net profit for the current period.
Although the performance contribution of Samsung's medical services segment is not as good as the former, it has also achieved high growth in the past two years.
According to the financial report, in 2022, the company's medical service segment will achieve an operating income of 206.5 billion yuan, a year-on-year increase of 5074%；Gross margin was 2672%, an increase of 5 year-on-year98 percentage points. In terms of profit, Soochow ** Research Report said that the company's medical service division will achieve a net profit of 1 in 20225.6 billion yuan, a year-on-year increase of 62%, and it is estimated that the pro forma profit added back to the amortization expense of equity incentive expenses will exceed 200 million yuan.
According to the 2023 interim report, the company's medical service segment achieved operating income of 127.5 billion yuan, a year-on-year increase of 4536%, achieving a net profit of 11.4 billion yuan, a year-on-year increase of 4778%。
Overseas market strength
Samsung Healthcare's smart power distribution business is divided into two markets: domestic and overseas, of which overseas markets have the most beautiful growth.
According to Guosheng** statistics, from 2017 to 2022, the annualized growth rate of Samsung Healthcare's overseas revenue is about 205%。In 2022, the company's operating income in foreign markets increased by 51% year-on-year83% to 16400 million yuan, the growth rate is significantly higher than the overall level of the intelligent power distribution and consumption sector. The company's 2023 interim report did not separately disclose overseas sales data, but for the increase in operating income, the company explained that it mainly benefited from the transformation of the global power grid and the increase in investment demand, indicating that the company's overseas market growth of smart distribution and electricity consumption is still optimistic.
With climate change in recent years, the demand for intelligent transformation of power grids around the world has become more and more intense, and countries around the world have successively formulated rotation plans, and the global demand for intelligent meter replacement continues to grow. On the other hand, most countries in Southeast Asia and Latin America have an increasingly strong demand for power infrastructure construction. According to PR Newswire, the global smart meter market was about $11.4 billion in 2022 and is expected to reach $15.2 billion in 2026.
In the face of overseas market opportunities, Samsung Healthcare actively responded to China's "One Belt, One Road" initiative and actively participated in the construction of global smart grids.
On the electricity side, Guosheng ** research report said that from 2019 to 2020, the company won nearly 1.5 billion yuan of smart meter orders in Sweden and Saudi Arabia projects, and is currently continuing to cultivate the Middle East, Europe, Africa, Latin America and other regions, and has made major breakthroughs in the power distribution business in South Asia, the Middle East and other markets; On the distribution side, the company has made major breakthroughs in the power distribution business in South Asia, the Middle East and other markets.
What is the secret behind Samsung Healthcare's continuous overseas exports? Brokers believe that this is related to their management incentives and channel capabilities.
From the perspective of equity structure, Zheng Jianjiang, the actual controller of Samsung Medical, holds a total of 4025% of the shares, the shareholding structure is stable. At present, the company implements a professional manager system, and Yi Shiwei is the president of the company, and he previously served as the executive deputy general manager and general manager of export sales of Samsung Intelligent Electric. Guosheng** believes that Yi Shiwei's past work experience is highly consistent with the company's overseas power distribution development strategy.
At the same time, in January 2022, Samsung Healthcare launched the fifth phase of the restrictive ** incentive plan for the intelligent power distribution and consumption sector, covering 159 core backbone personnel of intelligent power distribution and consumption management; The incentive ** will be lifted in three times, and the assessment requires that the non-net profit deducted from the intelligent power distribution sector from 2022 to 2024 will reach 59.1 billion yuan, 77.2 billion yuan and 1 billion yuan, an increase of % respectively compared with the base year of 2020. Samsung Healthcare's 2022 non-net profit of smart distribution deduction is 80.1 billion yuan, an increase of 76 over 202043%, successfully exceeding the incentive target.
From the perspective of channel capabilities, Samsung Medical reported in the middle of 2023 that the company relies on the three major manufacturing bases in Brazil, Indonesia, and Poland overseas, and radiates to more than 70 countries and regions such as Europe, Southeast Asia, and the Americas, becoming the Chinese manufacturer with the largest number of countries covered in the European market.
Although the growth rate of the domestic market of Samsung Medical's intelligent power distribution is not as fast as overseas, according to the data of the 2022 annual report, the company's domestic market revenue in this sector still achieved 2014% year-on-year growth. In addition, the company's high performance growth also benefited from improved profitability. According to the data listed earlier in this article, the net profit margin of the smart power distribution segment in 2022 and the first half of 2023 will be ., respectively63%。Guosheng ** said in this analysis that it mainly benefited from the company's order intensification, production process standardization and other measures to reduce costs and increase efficiency.
For the future, Soochow ** believes that the resonance of domestic and overseas demand, the performance of Samsung Medical's intelligent power distribution business is expected to maintain rapid growth. As of the end of the third quarter of 2023, the company's intelligent power distribution business has 114 orders in hand1.3 billion yuan, a year-on-year increase of 2974%。Among them, 69 domestic orders in hand0.2 billion yuan, an increase of 2073%；Overseas orders in hand 451.1 billion yuan, an increase of 46 percent year-on-year46%。
**Rapid expansion of hospitals
Samsung's medical services segment achieved high growth, mainly benefiting from the rapid expansion of ** hospitals.
In November 2021, Samsung Healthcare launched the fourth phase of the restrictive incentive plan specifically for the medical service sector, with a grant of 78 yuan shares, and the performance appraisal requires that the medical service income from 2022 to 2024 reach 181.9 billion yuan, 223.8 billion yuan, 279.8 billion yuan, an increase of % compared with 2020, and the number of new hospitals per year is not less than 10.
Under the incentive assessment, Samsung Healthcare will add 10 ** hospitals in 2022, half of which will be acquired and half of which will be self-built, successfully achieving the annual equity incentive target. Among them, the five ** hospitals acquired are Nanjing Mingzhou, Wuhan Mingzhou, Changsha Mingzhou, Changzhou Mingzhou, and Ningbo Beilun Mingzhou.
According to statistics from Tianfeng**, these five acquired hospitals will achieve a total net profit of 100 million yuan in 2022, which is higher than the performance commitment600 million yuan.
In March 2023, Samsung Healthcare announced that it intends to acquire 5 ** hospitals in Quzhou Mingzhou, Quanzhou Mingzhou, Yuyao Mingzhou, Huzhou Mingzhou and Jiaxing Mingzhou, with a total purchase consideration of 58.6 billion yuan, with a total of 13.5 billion yuan.
As of the end of the first half of 2023, Samsung Healthcare has a total of 25 hospitals, including 19 ** hospitals, with a total of about 7,300 beds. In the first half of 2023, the number of hospital discharges reached 2720,000, an increase of 25% year-on-year. Looking forward to the future, according to the equity incentive plan, the company acquires 4-5 hospitals and builds 4-5 hospitals by itself every year. Soochow believes that with the climbing and turnaround of self-built hospitals, mergers and acquisitions of hospitals and profit improvement, the company's medical business profits will maintain rapid growth.
However, there may be some problems behind the optimistic expectations. Samsung Healthcare** Hospital does not use a self-built model, but adopts a parallel model of self-construction and acquisition, and acquisitions are often accompanied by premiums.
In the March 2023 transaction, Samsung Healthcare's acquisition of 100% equity in Jiaxing Mingzhou, Quzhou Mingzhou, Yuyao Mingzhou, Quanzhou Mingzhou, and Huzhou Mingzhou was 37 million yuan, 84 million yuan, and 1., respectively1.2 billion yuan, 12.9 billion yuan, 22.4 billion yuan, the price is 1093 times, 568 times, 359 times, 608 times and 216 times. Among them, 3 target companies will still be in a state of loss in 2022, Jiaxing Mingzhou will lose 2.3 million yuan, Yuyao Mingzhou will lose 2.21 million yuan, and Quanzhou Mingzhou will lose 4.18 million yuan.
From the perspective of the transaction background, except for Huzhou and Mingzhou, there are He Xiwan, a direct related party of Samsung Medical's controlling shareholder, in the equity structure of other target companies, and He Xiwan is the brother of Zheng Jianjiang's spouse, the actual controller of the company. In this regard, the inquiry letter issued by the Shanghai Stock Exchange requires the company to explain the reasons and reasonableness of the difference between the relevant price of the target company and the pricing of this transaction since its establishment, and whether there is any situation of transferring benefits to related parties and potential stakeholders.
In the reply letter, Samsung Medical stated that based on the comparable transaction cases and transaction pricing in recent years, there are no obvious unreasonable differences in the evaluation methods and evaluation parameters; There are different reasons between the previous equity acquisitions** of the target company and the pricing of this transaction, and there is no transfer of benefits to related parties and potential stakeholders.
For the above-mentioned in vitro acquisition model, the inquiry letter issued by the Shanghai Stock Exchange concluded that the relevant announcement shows that since 2015, the company has successively acquired hospital assets from the related parties of the controlling shareholder, and almost all of the relevant acquisitions are related parties to incubate the relevant target assets in the early stage, and are acquired by the listed company at a higher premium when they have a slight loss or just realize a small profit.