The company released the 2023 semi-annual report: during the reporting period, the company achieved operating income of 220 million yuan, +63.87%; net profit after deduction of 70.56 million yuan, +84.43%; net profit after deducting net profit of 65.34 million yuan, +141.6%; in the second quarter, the company achieved operating income of 124 million yuan, +55.29%; net profit of 40.48 million yuan, +90.5% year-on-year; net profit after deduction.
Revenue and profit have grown strongly, and magnetic stimulation continues to be high: 1) 2023H1 has steadily and orderly promoted various tasks such as R&D technology, marketing, and human resources, etc., making every effort to strengthen channel coverage, key customer development and department development, achieve performance recovery and return to an upward channel, and net profit after excluding the impact of share payment expenses, achieved a 94.13% year-on-year increase of 94.13%. 2) By sector, magnetic stimulation revenue increased significantly by 98.31 million yuan (+76.45% year on year), electrical stimulation revenue was 31.3 million yuan (YoY +15.40%), electrophysiology revenue was 29.47 million yuan (YoY +41.18%), consumables and accessories revenue was 33.88 million yuan (+35.08% YoY), and laser RF contribution revenue was 16.35 million yuan. It is estimated that second-generation pelvic floor functional magnetism, second-generation transcranial magnetic stimulators, and second-generation group biodevices all received good market feedback and sales performance after iterative marketing. 3) The 2023H1 sales expense ratio, management expense rate, R&D expense ratio, and financial expense ratio were -2.24, -5.30, -7.76, and +1.13 percentage points year-on-year, respectively. Under a sharp increase in revenue and continuous cost reduction and efficiency, the company's profitability increased significantly.
Driven by R&D and innovation, the company is rich in new products and consolidates growth potential: 2023H1 continues to increase its R&D innovation and product pipeline, achieving R&D investment of 3.05 million yuan (15.04% of revenue), 175 R&D personnel (25.18% of total population), and achieved expected progress in various fields such as magnetic stimulation, laser radio frequency, and rehabilitation robots. Among them, Shaping Magnetics completed FDA510K registration and certification in March of this year, and is currently being registered domestically; it has successfully obtained a high-frequency electrocautery device Class II medical registration certificate and a semiconductor laser Class 3 medical registration certificate. In the registration process, picosecond laser therapy devices have formed a relatively comprehensive rehabilitation robot product matrix covering the upper and lower limbs. The rich pipeline and new products that advance smoothly will continue to inject new impetus into the company's long-term development.
The strategic acquisition of Coreda Laser has added strength to the collaborative development: the company focuses on the cornerstone business of rehabilitation while continuing to cultivate emerging businesses, including using the acquisition of Coreda Laser as an opportunity to further enhance urology-related department expansion and independent research and development capabilities in laser technology; continue to invest in picosecond lasers, radiofrequency, and shaped magnetic products that are mainstream in the medical and aesthetic energy source market, benchmarking international benchmarks to help domestic production replace imports and cultivate new growth.
Improve the talent incentive mechanism to help the company develop steadily over the long term: During the reporting period, the company launched the “2023 Restricted Stock Incentive Plan” to increase long-term incentives for key talents and help the company develop steadily. At the same time, the performance assessment goals also showed confidence in the company's development (all based on revenue or net profit in 2022, revenue growth of no less than 50% in 2023, or net profit growth of no less than 60%, revenue growth of no less than 80% or net profit growth of not less than 110% in 2024).
Profit forecast and rating: We expect the company's net profit to be 1.51, 1.95, and 240 million yuan from 2023-2025, an increase of 60.6%, 29.2%, and 23.5% over the previous year. The corresponding PE is 25x, 20x, and 16x, maintaining the “buy” rating.
Risk warning: Competition in the industry is intensifying, new product development and sales progress falls short of expectations, and there is a risk of brain drain.