Performance Brief
On April 25, the company released the 2022 annual report and the report for the first quarter of 2023. In 2022, the company achieved revenue of 10.609 billion yuan, or -0.5% year on year; achieved net profit of 2,203 billion yuan, +28% year on year; net profit of non-homo was 2,142 billion yuan, +16% year on year.
On a quarterly basis, 2022 Q4 achieved revenue of 2,848 million yuan, +41% over the previous year; Guimu's net profit was 393 million yuan, turning a loss into a profit; after deducting non-Gimu's net profit of 338 million yuan, turning a loss into a profit.
In 2023Q1, the company achieved revenue of 2,437 million yuan, or -4% year on year; net profit of returned mother was 597 million yuan, +9% year on year; after deducting net profit of non-return mother, 562 million yuan, +3% year on year.
Management analysis
Regular business is growing rapidly, and innovative equipment products have performed brilliantly. Although some hospital businesses were affected to a certain extent under control in 2022, the company's regular business continued to grow steadily. Among the main business, the medical device business achieved revenue of 5.879 billion yuan, -5% over the same period last year. If the impact of some emergency product revenue was deducted, the regular business achieved a 36% growth rate. Its central vascular implant intervention innovative product portfolio achieved a 44% increase in revenue, and innovative device products grew rapidly.
Research and development of major products progressed smoothly, and regular business resumed rapidly in the first quarter. In 2022, the company's R&D expenditure rate was 9.0%, +0.5pct compared to the previous year. Currently, the R&D pipeline product portfolio is rich, and the heavy blood flow reserve score meter (FFR equipment) has been approved by the Drug Administration, which is expected to contribute a new increase to the company. In 2023Q1, the company's gross margin reached 67.0%, +3.3pct over the previous year. The sharp increase in profit margins was mainly due to the rapid recovery trend in the regular business in the medical device sector. The share of high-margin products increased. It is expected that future revenue will return to a normal growth trajectory.
Focusing on AI medical applications, the pace of commercialization of related products is leading the way. The company is one of the earliest large-scale enterprises involved in artificial intelligence medical applications in the domestic pharmaceutical industry. In 2020, the Artificial Intelligence Research Institute was established to gradually focus the application of artificial intelligence medicine on the three major fields of vital sign monitoring for patients with chronic diseases, blood biomarker testing, and medical imaging applications related to cardiovascular implantation intervention. Artificial intelligence-related equipment and services have achieved a cumulative revenue of 590 million, and AI is expected to bring new competitive advantages and growth points to the company in the future.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the future development potential of the company's innovative device products in the field of cardiovascular intervention. We expect the company's net profit to be 25.40, 30.09, and 3,597 billion yuan respectively in 2023-2025, up 15%, 18%, and 20% year-on-year. EPS is 1.35, 1.60, and 1.91 yuan respectively. The current price corresponding to PE is 17, 14, and 12 times, maintaining the “buy” rating.
Risk warning
Health insurance fee control policy risks; risk of new product development falling short of expectations; risk of product promotion not meeting expectations; risk of impairment of goodwill.