"Yingke Medical Plans $80M-$120M Share Repurchase Amid Non-NA Fast Growth"

On the evening of September 19th, Yingke Medical (300677.SZ) announced that, based on confidence in the company's continuous development prospects and a high recognition of its value, the company plans to use its own funds of not less than 80 million yuan (inclusive) and not more than 120 million yuan (inclusive) to repurchase some of the company's shares through centralized bidding transactions. These shares will be used to implement employee stock ownership plans and/or equity incentives.

Yingke Medical stated that this repurchase reflects the management's affirmation of the company's long-term intrinsic value. According to the Securities Times · Data Treasure statistics, this year, a total of 1,290 listed companies on the A-share market have issued repurchase plans (excluding targeted repurchases), which is double the 611 companies from last year, setting a new historical record. Looking at a longer period, the number of listed companies issuing repurchase plans has increased for four consecutive years.

In terms of industry distribution, listed companies issuing repurchase plans are mainly concentrated in six industries, including electronics, pharmaceuticals and biotechnology, mechanical equipment, computers, basic chemical industry, and power equipment, with the number of repurchasing companies in each industry exceeding one hundred. Among them, the electronics and pharmaceuticals and biotechnology industries have the highest number of companies, both with 161.

The implementation of repurchases by listed companies with real money will undoubtedly enhance the stability of the capital market and boost investor confidence.

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The return to balance of supply and demand, and a significant improvement in profitability.

Yingke Medical is a comprehensive medical care product supplier based in China, with business operations worldwide. The company's headquarters are located in Zibo, Shandong Province, and its main business covers three major areas: personal protection, rehabilitation care, and other products. The main products include disposable gloves, wheelchairs, cold and hot compresses, electrode pads, and various types of care products, which are widely used in medical institutions, elderly care institutions, household daily use, and other related industries.

The company's products are mainly sold to various parts of the world through exports, including more than 120 countries and regions in the Americas, Europe, Asia, Africa, and Oceania, serving more than 10,000 customers worldwide.

Disposable gloves are currently the company's core business, with a leading market share in China and globally.

In the first half of 2024, the disposable glove industry saw a clear effect of industry consolidation, with an overall increase in the utilization rate of industry capacity, and the supply and demand relationship is gradually returning to balance.At the same time, Yingkou Medical continues to carry out technological upgrades to its production lines, and through lean innovation measures such as increasing line speed and reducing energy consumption, the company's profitability has been significantly enhanced.

In the first half of 2024, the company achieved a revenue of 4.512 billion yuan, a net profit attributable to the parent company of 587 million yuan, and a net profit of 487 million yuan after deducting non-recurring gains and losses, all of which increased by 36.94%, 100.24%, and 185.23% year-on-year, respectively.

Customs data shows that since February 2024, the export price of medical nitrile gloves has increased month by month, reaching 17.6 US dollars in July (an increase of 2.2 US dollars from the bottom of 23Q4), an increase of 14.29%.

Thanks to this, the company's sales gross margin has rebounded for five consecutive quarters, increasing from 13.42% in 23Q2 to 23.09% in 24Q2.

Yingkou Medical revealed in the mid-year report telephone conference call for 2024 that, judging from the company's current orders and the order prices for the fourth quarter, the price trend is upward.

The European market is growing rapidly, moving towards the global leader in nitrile gloves.

It is worth mentioning that the company's non-North American market growth is relatively fast, especially in the European market, the Middle East, and South America.

Looking at the current regional share of the company's overseas revenue, the US market accounts for about 35%-40%, and the European market accounts for a share that is basically equal to the US.

The current growth of the European market is very fast, and the price and gross margin are basically on par with the US market.

At present, the overall compound annual growth rate of the disposable gloves industry is about 6%-8%. Among them, the growth rate of disposable nitrile gloves is faster. According to a report by Frost & Sullivan, the compound annual growth rate of disposable nitrile gloves can reach more than 10%, and it is expected that the demand for disposable nitrile gloves will continue to rise in the future.Yingke's nitrile glove production lines, mostly established and put into operation after 2020, are technologically advanced, have high line speeds, low energy consumption, low weight, and stable operation, giving them a significant competitive advantage.

Thanks to China's supply chain and energy advantages, the manufacturing costs are significantly lower than those in Malaysia. At the same time, in the past few years, the newly expanded production capacity of Chinese manufacturers has been more advantageous compared to the high-cost and outdated capacities in Malaysia.

In the future, the trend of the disposable glove industry concentrating at the top and shifting towards China will further accelerate.