Event: The company announced its 2022 annual report and its 2023 quarterly report. In 2022, the company achieved operating income of 10.609 billion yuan, a decrease of 0.5% over the previous year, net profit of 2,203 billion yuan, an increase of 28.1% over the previous year, after deducting non-net profit of 2,142 billion yuan, an increase of 15.50% over the previous year
By industry, medical devices are the main source of the company's performance growth. In 2022, the medical device business achieved revenue of 5.879 billion yuan, a year-on-year decrease of 4.71%; pharmaceutical revenue of 3.438 billion yuan, an increase of 5.52% over the previous year; and medical services and health management achieved revenue of 1,293 billion yuan, an increase of 4.91% over the previous year.
On a quarterly basis, the company achieved revenue of 2,848 billion yuan in the fourth quarter of 2022 alone, an increase of 40.62% over the previous year, net profit of 393 million yuan, an increase of 294.56% over the previous year, after deducting non-net profit of 338 million yuan, an increase of 246.76% over the previous year. The company's single-quarter performance grew rapidly, mainly affected by the low base for the same period in 2021. In the first quarter of 2023, the company achieved operating income of 2,437 million yuan, a year-on-year decrease of 4.39%, net profit of 597 million yuan, an increase of 9.45% over the previous year, after deducting non-net profit of 562 million, an increase of 2.78% over the previous year. There was a slight slowdown in Q1 performance growth, mainly affected by short-term disruptions after the COVID-19 pandemic, as well as incentive fee amortization and exchange rate fluctuations. Excluding relevant non-operating factors, the company's net profit growth rate after deducting non-return to the parent company reached 15.61% year-on-year in 2023Q1.
The cardiovascular sector continues to soar. IVD and surgery use collection prices to accelerate volume, and the overall growth rate of conventional business is 35+%. The company's medical device sector revenue in 2022 was 5.879 billion yuan, a year-on-year decrease of 4.71%. After excluding emergency products, the growth rate of regular business in the device sector reached 35.64% in '22. The company's medical device business mainly includes the three major sectors of cardiovascular implantation, in vitro diagnosis, and surgical anesthesia. Its central vascular implantation maintained a high increase driven by innovative product combinations such as drug balloons, cut balloons, and absorbable stents. In 2022, revenue from the innovative product portfolio increased 43.60% year-on-year, and the renewal price of coronary artery collection products rose slightly, achieving a smooth transition; in 22, Fujian stapler collection company won the bid, which is expected to continue the previous growth trend; the extracorporeal diagnosis sector company won the bid in '22, which is expected to continue the previous growth trend; the extracorporeal diagnosis sector company won the bid in '22; the extracorporeal diagnosis sector is expected to continue the previous growth trend; the extracorporeal diagnosis sector is expected to achieve a continuation of the previous growth trend; Close to full Product line layout, further expanding in-hospital channels through volume procurement. In 2022, all of the projects submitted by Jiangxi Biochemical Collection Company were selected. It is expected that the terminal market will quickly open up in the future and increase terminal share.
The growth rate of the pharmaceutical sector is steady, and the combination of formulations+generic drugs+innovative drugs has consolidated the foundation for long-term growth. In 2022, the company's pharmaceutical sector achieved revenue of 3.438 billion yuan, an increase of 5.52% over the previous year. Among them, the pharmaceutical business revenue was 2,999 million yuan, an increase of 606% over the previous year, and the API business achieved revenue of 449 million yuan, an increase of 2.06% over the previous year. The company's product layout closely revolves around cardiovascular patients and continues to explore the market space for generic drugs and proprietary Chinese medicines. In the fields of diabetes, hypertension, hyperlipidemia, etc., 11 products have entered the market review stage, and 1 product is in clinical trials. At the same time, the company is actively seeking innovative drug cooperation opportunities, and the pharmaceutical business is expected to continue to develop steadily in the future.
Accelerate the deployment of AI healthcare. The release of consumer products is imminent, and medical services are expected to accelerate. In 2022, the company's medical services and health management segment achieved revenue of 1,292 million yuan, an increase of 4.91% over the previous year. After excluding contributions from emergency products, regular revenue increased 11.73% year-on-year. Medical service is an innovative business actively cultivated by the company. Based on artificial intelligence technology, the company is actively deployed in the fields of ECG monitoring for chronic patients, non-invasive blood sugar testing, and continuous creatinine urea nitrogen monitoring, etc., and is expected to become a new performance growth point in the future. In the field of consumer medicine, the company has launched a variety of products in the fields of medical aesthetics, myopia correction, and invisible orthodontics. It is expected that 2023 will rapidly commercialize the medical service business, driving the performance of the medical service business to accelerate performance.
Profit forecast and valuation: Based on the annual report and quarterly report data, we adjusted the profit forecast. It is expected that the domestic epidemic situation will ease, and regular business is expected to recover at an accelerated pace. The company's revenue in 2023-2025 is expected to be 118.01, 142.13, and 16.882 billion yuan, up 11%, 20%, 19% year-on-year (115.69 billion yuan in 23-24 before adjustment), Guimu's net profit of 25.25, 29.96 billion yuan, 3,552 billion yuan, a year-on-year increase of 15%, 19% (23-24 years before adjustment) 24.04, 2,868 billion yuan). Considering that the company's innovative products such as absorbable stents have entered the release stage, innovative devices have strong growth potential in research pipelines and maintained a “buy” rating.
Risk warning: risk of product marketing not meeting expectations, risk of policy change, risk of product development failure.