Event: the company released its mid-2023 report, with revenue of 665 million yuan (+ 19.22% YOY), net profit of 58.86 million yuan (+ 728.20% YOY) and non-return net profit of 44.4 million yuan (+ 1072.95%YOY) in the first half of 2023. 2Q2023 realized income of 321 million yuan (+ 20.46% YOY) and net profit of 31.7 million yuan (+ 563.37% YOY).
Comments:
1H23 gross profit margin improved year-on-year, the company's product structure adjustment and cost reduction measures gradually appeared. The company's 1H23 realized a gross profit margin of 34.52%, an increase of 4.38pct over 1H22. The gross profit margin of 1H23 monitor and hemodialysis products was 50.30% and 25.25% respectively, which increased 4.45pct and 3.85pct compared with 1H22. The effect of the company's product structure adjustment is gradually emerging, the increase of the gross profit margin of the monitor products benefits from the increase in the proportion of income of the middle and high-end monitor products with higher gross profit margin, and the increase of the overall gross profit margin is gradually driven by the volume of hemodialysis machines and dialyzers in hemodialysis products.
The company actively takes measures to reduce costs, gradually unify the procurement of raw materials for hemodialysis products and coordinate the transportation of hemodialysis products at the group level, actively reduce costs, strengthen cost control, and further promote the overall gross profit margin.
2Q23 net interest rate increased month-on-month, actively control the rate of sales and management expenses. 2Q23 and 1Q23 achieved net interest rates of 10.20% and 8.21% respectively, and the company's net interest rate rebounded from the previous month. The company has actively carried out cost control, and the sales expense rate and management expense rate have been reduced twice. The sales expense rates of 4Q22, 1Q23 and 2Q23 are 16.49%, 14.32% and 12.40% respectively. The rates of 1Q23 and 2Q23 management expenses are 7.78%, 6.81% and 6.67%, respectively. By constantly optimizing the sales organizational structure, improving the comprehensive marketing capacity building, strengthening the unified management of the group, and actively carrying out cost control, the rate of sales and management expenses is expected to continue to decline steadily.
Adhere to independent R & D and innovation, accumulate energy to develop new momentum. Enter the field of peritoneal dialysis, PD600 peritoneal dialysis equipment and supporting the use of disposable peritoneal dialysis pipes have been registered, peritoneal dialysis consumables have been launched, for the development of energy storage in the field of peritoneal dialysis. To create new infusion pump products, BioFusion S500 infusion pump and BioFusion CMS infusion central monitoring software have been obtained, combining innovative technology to help the company improve its market competitiveness in infusion products.
G series monitor, injection pump, CRRT, AED and other projects are progressing steadily. The company insists on independent innovation, guided by the needs of doctors and patients, and successively launches new products to develop new momentum.
Earnings forecast, valuation and rating: the company's profitability has been gradually repaired and the cost side has been strengthened. We have raised the company's 23-25 net profit forecast for 23-25 to RMB 1.37 billion (above the previous value + 33% PE), with an EPS of RMB 0.52 and 0.68, respectively. The current price for 23-25 is twice as high as that of 31-23-17, maintaining the "buy" rating.
Risk tips: product and raw material price fluctuations; industry growth is not as expected; investment expansion is not as expected; new product sales and promotion is not as expected.