Main points of investment
Rapid growth in performance: the company released the mid-2023 report that 2023H1 realized income of 206 million yuan (+ 30%, year-on-year growth, the same below), net profit of 79 million yuan (+ 44%), and net profit of 77 million yuan (+ 33%). 2023Q2 realized income of 115 million yuan (+ 44%), net profit of 45 million yuan (+ 64%) and net profit of 43 million yuan (+ 38%) in a single quarter. The performance of 2023H1 company has achieved rapid growth, with the gradual recovery of outpatient diagnosis and treatment, the rapid increase in the number of operations, the rapid growth of revenue, the appearance of scale effect, and the stable and high level of profit margin. At the same time, the company intends to issue an equity incentive plan to senior management and some core technical personnel, granting a total of 476500 restricted shares, accounting for 0.823% of the company's total equity at the time of the announcement of the draft incentive plan.
Endoscopic diagnosis and treatment consumables are growing rapidly, and innovative products help to seize the market. The diagnosis and treatment of 2023H1 clinic gradually recovered, and the increase of the amount of operation led to the rapid release of consumables. The company's domestic market sales revenue fell 8% in the first quarter compared with the same period last year, and with the full recovery of surgery in the second quarter, sales revenue increased by 49% compared with the same period last year. The domestic income of 2023H1 is 102 million yuan (+ 21%). It seizes the market through innovative products such as removable, replaceable hemostatic clips and bipolar treatment systems to achieve rapid import substitution. At the same time, the company continued to increase R & D investment, 2023H1 R & D expenditure of 18 million yuan (+ 24%), to promote the second generation of single and double hybrid electric knife equipment, the second generation bipolar mucosal incision, suture clip, hair clip and short tail clip and other product development work, for clinical pain points to continue to speed up product iteration. In the future, the company will gradually form new core technologies in the fields of single optical fiber imaging technology, adjuvant therapy robot and soft endoscope diagnosis and treatment.
Accelerate channel expansion and make efforts to expand overseas markets. 2023H1 has added more than 200 new products to hospitals, and the level of clinical customers continues to improve. The proportion of third-class hospitals and second-class hospitals reached 42.66% and 28.44% respectively. At the same time, the marketing service system was upgraded, the sales staff increased by more than 15% compared with the same period last year, and the management of dealer training was strengthened to continuously improve the stickiness of clinical services, so as to speed up product sales. The expansion of the overseas market has accelerated, and the company has made great efforts to expand the South American and Asia-Pacific markets on the basis of consolidating the European market and developing customers in the North American market. The number of new overseas customers has increased by 18%. And formulate differentiated marketing strategies according to the characteristics of overseas markets and the actual needs of customers, and actively promote the sales of their own brands. 2023H1 achieved sales revenue of 30.5726 million yuan (+ 36%) in North America, 49.4612 million yuan (+ 37%) in the European market, and 21.6644 million yuan (+ 69%) in other overseas markets.
Investment suggestion: the company's net return profit from 2023 to 2025 is expected to be RMB 2.02 million, respectively, with a growth rate of 39%, 32% and 23%, respectively, and the corresponding PE is twice as much as 29-22-18. Considering that the recovery of in-hospital diagnosis and treatment this year has led to the rapid expansion of the company's products, with the advantage of differentiated products to accelerate import substitution, while making efforts to expand customers in overseas markets, the company's performance is expected to continue to grow rapidly. Cover for the first time and give suggestions for "increasing holdings".
Risk hint: product sales are less than expected risk, concentrated with volume procurement risk, overseas expansion is not as expected risk.