The company disclosed its 22-year results announcement. Revenue reached 5.620 billion yuan, +26.4% year on year, with the merger of some hospitals bringing an increase; Guimu's net profit was -66.7% year-on-year to 139 million yuan, mainly Huaiyin Hospital's operating loss in '22 was 76 million yuan, accounts receivable impairment was 45 million yuan, and goodwill impairment was 108 million yuan. At the same time, exchange losses amounted to 155 million yuan.
Under adverse external circumstances, medical business revenue and outpatient and hospitalizations all increased. In '22, medical revenue increased 0.8% year on year to 8.34 billion yuan; excluding nucleic acid, the number of outpatient clinics was +2.1% year on year, and the number of hospitalizations was +1.5% year on year. The total profit contribution of hospitals was 657 million yuan, -5.9% year on year; the hospital profit contribution rate was 7.9%, -0.5ppt year on year; the decline in hospital profit and profit contribution ratio was mainly due to the increase in losses of Huaiyin Hospital. After excluding Huaiyin, the profit contribution rate remained flat at 9.6%. In terms of profit contribution ratios of its hospitals, with the exception of Jiangong and Xu Kuang, which declined, all other hospitals increased.
Cash purchases of Liaojian and Jiangneng will greatly enhance performance and reserve space science and technology projects. Liao Jianjiang Neng's total revenue in '21 was 3.89 billion yuan, profit after tax was 234 million yuan, and 22H1 after-tax profit was 228 million yuan. There was a marked increase in performance. After the acquisition is completed, the listed company will have nearly 22,700 beds and 13 tertiary hospitals. The reserve project Aerospace Science and Technology has 2,000+ beds, 2 tertiary hospitals and 4 major medical institutions, with revenue reaching 2.09 billion yuan.
Profit forecasts and investment ratings. If Liao Jianjiang Neng's share is not taken into account, it is estimated that the net profit returned to the mother in 23-24 will be 493/542 million yuan. The performance of its hospitals recovered and operational efficiency improved in '23. The operation of Huaiyin Hospital is expected to improve, and the cash acquisition of Liao Jianjiang will greatly enhance its performance. Referring to the valuation of comparable companies, 20 times PE was given over 23 years, corresponding to a reasonable value of HK$8.74 per share. Assuming that 23H2 is consolidated, according to rough estimates based on the assumptions in the text, it is estimated that the company's net profit returned to the mother in 23-24 was 678/949 million yuan. Maintain a “buy” rating.
Risk warning. The expansion process of the Group's hospital network fell short of expectations; the integration or operation of mergers and acquisitions of hospitals fell short of expectations; exchange rate fluctuations brought market risks.