CICC Irradiation: Taikang Assets, CITIC Construction Investment and other 2 institutions investigated our company on January 18

On January 18, 2022, CICC Irradiation (300962) issued an announcement that Taikang Asset Fu Hongzhe and CITIC Construction Investment Yang Mingchun investigated our company on January 18, 2022.

The main contents of this survey are:

Q: According to the company's performance forecast, the forecast range of net profit attributable to the mother for the whole year is 82.46-98.46 million yuan, and the median value is 90.46 million yuan; Non-recurring 7.6-9.6 million yuan, median value of 8.6 million yuan; That is, the median value of deducting non-net profit is 9046-860 = 81.86 million yuan, and if the non-net profit is deducted 76.22 million yuan in the first three quarters of 2021, it is expected to be 5.64 million yuan in Q4 of 2021.

A: According to the 2021 annual performance forecast released by the company in the previous period, it can be deduced that the net profit in the fourth quarter fluctuated somewhat compared with the previous three quarters, mainly due to the company's annual employee performance compensation concentrated at the end of the year.

Q: What are the incentives for employees in different departments (sales, technology, management, etc.) assessment?

A: In accordance with the relevant spirit of the documents of the three ministries and commissions of the state, the company has formulated the "Incentive Plan for the Sale of Equity of CICC Irradiation Co., Ltd.", and implemented the equity sale incentive for the core business backbone (including management personnel, technical personnel, market personnel, production backbone, etc.). The company has also formulated a series of assessment methods and programs for market sales personnel, technicians and management personnel, such as "Market Development and Maintenance Incentive Plan", "Reward Method for Scientific and Technological Innovation", "Transformation of Scientific and Technological Achievements and Income Distribution System", "Performance Appraisal Program" and so on, in order to further improve their enthusiasm, initiative and creativity.

Q: What is the company's quality control system?

A: The company attaches great importance to process quality control, through decades of dedicated management, continuous research and development investment and continuous independent innovation, the company has established a sound quality control system in terms of dose management, quality management and sterilization process. First, it has a perfect dose management system, a comprehensive grasp of the operating procedures and deviation control methods of the dosimeter system, the dose measurement equipment is verified, the dose value is traced every year, and the dose comparison calibration is carried out with the GEX dose laboratory to ensure the accuracy of the dosimeter measurement value and better meet the needs of different types of customers; the second is to have a strict quality management system, and establish and improve the quality, environment and occupational health and safety management system that meets international standards. Over the years, the management system has passed the audit of third-party certification bodies such as SGS, BSI, TUV Rheinland, TUV SÜD, etc., and the annual review of the customer's supplier management system. The relevant ownership companies have also passed the on-site inspection of foreign regulatory agencies such as the US FDA, Health Canada, and the South African Drug Administration, as well as the on-site verification by third parties entrusted by the Japanese Ministry of Health, Labor and Welfare and the relevant agencies of the European Union; the third is to have exquisite sterilization process technology, in terms of sterilization verification, using a variety of density simulation products for irradiation device dose distribution research, establish and fully verify the MCNP model, provide a solid foundation for the development of the irradiation process for customers, in addition, For the different needs of different customers and their product characteristics, repeated dose distribution studies are carried out, and customized sterilization schemes are established to ensure that the dose of the irradiation target meets the customer's requirements to the greatest extent.

Q: What are the settlement methods with customers (advance receipt, account period, balance, etc.)?

A: At present, the company mainly has two major types of business, irradiation service business and disinfection supply business. For the irradiation service business, the company's settlement method is divided into two methods: monthly settlement and pay-as-you-go. For the disinfection supply business, the company's settlement method is divided into two ways: annual and non-annual. In principle, the Company does not have an advance receipt method for customer settlement. There is no problem with the account period of the current settlement customer, and in the irradiation service business, for the monthly settlement customer, the general settlement is not more than 60 days. In terms of disinfection supply business, for customers who are scheduled for the year, they are generally paid on a monthly basis; for non-annual customers, they are generally settled every month, not more than 30 days. The company and the customer generally do not agree on the balance.

Q: How is the quotation trend of gamma radiation for different types of customers such as medical and food?

A: The company's sales pricing mechanism is to conduct a comprehensive comprehensive analysis and quotation by counting the resource consumption of various types of products, combining the economic development situation, industry trends, industry competition status, and industry production capacity, analyzing the cost composition, referring to the historical price of the product and the price of similar products of competitors. In the past period of time, the company's quotations to medical and food customers have risen to varying degrees, and the future quotation trend also needs to be based on the sales pricing mechanism and comprehensive consideration of specific customers, market factors and other circumstances.

Q: What is the purchase volume and price trend of cobalt sources?

A: The company's cobalt source procurement volume is determined according to market demand and the development and application of multi-technical means, and the amount of cobalt source procurement in 2020 is 18.44 million yuan, and the amount of cobalt source procurement in the first half of 2021 is 11.67 million yuan. In the past two years, although the purchase price of cobalt sources has risen to a certain extent, the company can effectively transfer the impact of the rise in the price of cobalt sources to the client, thereby eliminating the adverse effects of the rise in the price of cobalt sources.

Q: What is the status of long-term supply contracts with CNNC Tongxing, Nordian and others?

A: At present, the company and CNNC Tongxing have signed a long-term supply contract, and the renewal of the long-term supply agreement with Nordian is still under negotiation.

Q: How to improve the utilization rate of cobalt sources and unit output value?

A: The company's improvement of cobalt source utilization rate is mainly achieved by optimizing the irradiation device design to improve the utilization rate of radiation, strengthening equipment maintenance and maintenance to improve equipment utilization, optimizing the irradiation scheme to improve the product packing rate, improving the irradiation process to accurately control the dose and reduce the unevenness. The unit output value is specific to our company, which is mainly the income per curie cobalt source. At a certain capacity, the company's unit output value is mainly achieved by increasing the unit price of products (especially products with high added value), developing market customers, improving the utilization rate of cobalt sources, and improving labor productivity.

Q: How sensitive are different types of customers to gamma-ray radiation prices?

A: Customers with export products, high added value, and high requirements for quality control have relatively low price sensitivity, such as medical customers. Food and daily necessities customers are relatively sensitive to price.

Q: What is the service radius of the gamma-ray irradiation device? Who are the main customers? What about expanding the scope of applications in the future?

A: Generally speaking, the service radius of a device can cover 200-400 kilometers from the perspective of logistics and economic rationality of transportation. Major customers include manufacturers of healthcare, food, pharmaceuticals, daily necessities, packaging materials, polymer materials and other products. The scope of future expansion and application mainly includes some products newly developed, newly expanded and newly applied in the fields of biopharmaceuticals, food, medical devices, material modification, packaging materials and other fields.

Q: What is the approval department and process for gamma-ray radiation projects?

A: Project approval requires a radiation safety permit issued by the Ministry of Ecology and Environment before it can be operated. Radiation safety license issuance process: Relevant units submit application materials to the Ministry of Ecology and Environment→ the Ministry of Ecology and Environment review materials, conduct on-site verification, and convene expert review meetings→ the nuclear radiation regulatory department of the Ministry of Ecology and Environment to review the materials, hold a meeting to approve, and issue a radiation safety license after approval by relevant leaders. In addition, in the process of project construction, it is also necessary for local government management departments such as national development and Reform Commission, land planning, construction management, ecological environment, and health and other relevant intermediary agencies to approve, permit or file project approval, land use, planning and construction, health assessment, environmental assessment, etc.

Q: What is the number and volume of other gamma-ray irradiation companies?

A: According to the information we learned through research and the Internet in the early stage, as of the end of 2019, we estimate that the design source of more than 300,000 γ irradiation devices in operation nationwide is more than 120, and the total design and installation volume is about 176 million curia.

Q: How to deal with cobalt source after decommissioning?

Answer: For the decommissioning of the company's imported cobalt source, the whole process is carried out under the supervision of the national ecological environment department, which needs to obtain the approval of the ecological environment department in advance, and obtain the record of the regulatory department of the place of departure, and finally after the completion of the decommissioning, it is necessary to file with the provincial ecological environment department where it is located; in addition, the inverted source and transportation are operated by institutions and personnel with corresponding qualifications, of which the sealed containers for storing and placing the cobalt source need to be tested by the competent authority and filed with the State Nuclear Safety Administration to meet the requirements of the state on the transportation of dangerous goods Cobalt source transportation needs to travel according to the approved route and limited speed, and the transport unit also needs to formulate a corresponding accident emergency plan for special situations such as anti-terrorism and anti-theft.

Q: What is the price difference between electron accelerator irradiation and gamma-ray irradiation?

A: Gamma radiation and electron accelerator irradiation prices are affected by investment costs, operating control costs, customer demand, market competition and other factors, in general, gamma ray irradiation and electronic accelerator irradiation have their own advantages, gamma radiation has strong ray penetration, wide application, low carbon environmental protection and energy saving and other significant advantages, electronic accelerators have high efficiency, ray switchable control and other advantages, for both technical means are applicable to products, at present, electronic accelerators have advantages over the price of gamma radiation radiation.

Q: What is the manufacturer and purchase price of the electron accelerator?

A: At present, the company's electronic accelerator equipment manufacturers are Tongfang Nuctech Technology Co., Ltd. and Jiangsu TongweiXinda Technology Co., Ltd. (established by Tongfang Nuctech). In view of the different needs of different companies for equipment functions and parameters, the purchase price is not the same, and the specific purchase price has been published on the relevant bidding website.

Q: What are the future configuration plans for electronic accelerators?

A: The company's Qingdao electronic accelerator project has been officially put into operation, and the sterilization project of 300,000 cubic meters of CICC Health (Jiaxing), which is under construction, and the Chengdu company's expansion of the electronic accelerator project that is carrying out preliminary work have also used electronic accelerator technology. In the next step, the company will continue to follow the strategic development idea of "irradiation technology service-oriented, multiple technical means at the same time, and related diversified industries extended", follow the principle of "taking the national strategy as the support, taking the group strategy as the guide, taking the regional economy as the basis, and taking the market prospect as the core", and decide whether to promote and when and where to promote the implementation of the electronic accelerator project according to the market research and feasibility study analysis, so as to better optimize the company's investment layout.

Q: What is the trend of electronic accelerator irradiation for different types of customers such as medical and food?

A: The company's sales pricing mechanism is to analyze the cost composition by counting the resource consumption of irradiation services for various categories of products, combining the economic development situation, industry trends, competition in the same industry, and industry production capacity, comprehensively refer to the historical prices of various categories of products and the prices of similar products of competitors, conduct a comprehensive comprehensive analysis and quotation of various types of products. The future quotation trend of the electronic accelerator Irradiation also needs to be quoted according to the sales pricing mechanism and comprehensive consideration of specific customers and market factors.

Q: What is the e-Accelerator Service Radius? Who are the main customers? What about expanding the scope of applications in the future?

Q: How to convert the capacity of electron accelerator irradiation and gamma ray irradiation?

A: According to the information we learned from the manufacturer, in theory, the energy released by the 1kW electron accelerator is equivalent to the energy released by the 67,000 Curie cobalt source. Specifically in the actual application process, in view of the device settings, product and packaging density, utilization rate of ray and electron beams, process control requirements and other influencing factors, for different products, the capacity conversion of the two technical means is not the same, and the mutual conversion is relatively complicated.

Q: What is the approval department and process for e-accelerator irradiation projects?

A: Project approval requires a radiation safety permit issued by the Provincial Department of Ecology and Environment before it can be operated. Issuance of radiation safety permit process: the relevant units submit application materials to the Provincial Department of Ecology and Environment→ the Provincial Department of Ecology and Environment review the materials, conduct on-site verification, and convene an expert review meeting to review the data → the Provincial Department of Ecology and Environment, convene a meeting to approve it, and issue a radiation safety permit after approval by the relevant leaders. In addition, in the process of project construction, it is also necessary for local government management departments such as national development and Reform Commission, land planning, construction management, ecological environment, and health and other relevant intermediary agencies to approve, permit or file project approval, land use, planning and construction, health assessment, environmental assessment, etc.

Q: What is the number and volume of other e-accelerator companies?

A: According to the information we learned through research and the Internet in the early stage, as of the end of 2019, we estimate that there are more than 50 10Mev high-energy electron accelerators in operation and under construction nationwide, with a total power of about 1200KW.

THE MAIN BUSINESS OF CICC IRRY: MAINLY ENGAGED IN IRR IRR TECHNICAL SERVICES

ACCORDING TOCC IRR's 2021 third quarter report, the company's main revenue was 230 million yuan, up 26.29% year-on-year; the net profit attributable to the mother was 81.3727 million yuan, up 75.09% year-on-year; the deduction of non-net profit was 76.219 million yuan, up 70.28% year-on-year; among them, in the third quarter of 2021, the company's single-quarter main revenue was 82.4947 million yuan, up 18.58% year-on-year; the single-quarter net profit attributable to the mother was 28.5685 million yuan, up 30.36% year-on-year. In the single quarter, the non-net profit was 28.3133 million yuan, up 33.27% year-on-year; the debt ratio was 12.79%, the financial expense was -419,400 yuan, and the gross profit margin was 63.06%.

The unit has not had an institutional rating in the last 90 days. In the past three months, the net inflow of financing was 57.0985 million, and the balance of financing increased; the net inflow of margin was 0.0 million, and the balance of margin increased. The Securities Star Valuation Analysis Tool shows that CICC Irradiation (300962) has a good company rating of 3 stars, a good price rating of 1.5 stars, and a valuation comprehensive rating of 2 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)