Performance Brief
On August 25, 2023, the company released its semi-annual report for 2023. In the first half of 2023, the company achieved revenue of 4.301 billion yuan, -19% year-on-year; realized net profit of 961 million yuan, or -24% year-on-year; achieved net profit of 905 million yuan, or -28% of non-homologated net profit.
On a quarterly basis, in 2023Q2, the company achieved revenue of 1,864 million yuan, -33% year-on-year; realized net profit of 365 million yuan, -50% year-on-year; achieved net profit of 342 million yuan after deducting non-attributable net profit of 342 million yuan, or -52% year-on-year.
Management analysis
Innovative cardiovascular products continue to grow, and new FFR products have been successfully approved. The decline in the company's revenue in the first half of the year was mainly due to the high base of the emergency business. The conventional medical device business was still further expanded. Revenue from the innovative cardiovascular implant intervention product portfolio increased 13.3% year-on-year. Vicor-Angio FFR, a software for calculating blood flow reserve scores for coronary angiography images, was successfully approved for listing in China. While enriching the company's product portfolio in the field of interventional radiology, it also provided a new evaluation tool for achieving accurate coronary intervention treatment.
The surgical anesthesia business is growing rapidly, and the subsidiary is expected to be spun off and listed. The company's surgical anesthesia business achieved a 21.2% year-on-year increase in revenue in the first half of the year. Products such as staplers won bids with multiple brands in volume procurement from different inter-provincial alliances. The commercialization advantages brought about by the implementation of volume procurement are remarkable, and the product market share is expected to increase further. Earlier in July, the company issued an announcement stating that it plans to split its holding subsidiary Bingkun Medical into the Shenzhen Stock Exchange's GEM listing. The competitiveness of the surgical anesthesia business is expected to further increase after listing.
Actively cultivate emerging business segments and rapidly expand consumer medical products. In the first half of the year, the company's medical services and health management sector achieved revenue of 686 million yuan, an increase of 15.2% over the previous year. The company's research and development of new medical, aesthetic and ophthalmic products advanced further. In the first half of the year, the company's 5 products, including polylactic acid dermal fillers, advanced to the clinical stage. 2 ophthalmic products such as corneal shaping lenses or registration certificates, 5 ophthalmology products including soft hydrophilic contact lenses were registered, and 3 ophthalmic products, including multi-focus intraocular lenses, entered clinical trials.
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 24.17, 28.64, and 3.421 billion yuan respectively in 2023-2025, up 10%, 18%, and 19% year-on-year. EPS is 1.29, 1.52, and 1.82 yuan respectively, and the current price corresponds to PE 14, 12, and 10 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.