Core views:
The company disclosed the 2023 interim results announcement. According to data from Liaojian Jiangneng on June 2, '22, the company traced back to June 2, 22, revenue +59.5% to reach 5.114 billion yuan, of which Liao Jian and Jiang Neng earned 2,091 billion yuan and stock revenue was 3,023 million yuan; net profit was +62.5% to 398 million yuan. Among them, Liao Jian and Jiang Neng's net profit was 199 million yuan, net profit attributable to stock attribution was 199 million yuan, and the increase in income tax corresponding to revenue from hospital management services increased by 95 million yuan (year-on-year increase).
The revenue from the medical business was about +10% year-on-year, and the growth rate of hospitals in stock was slightly higher than that of Liaojian Jiangneng. 23H1 achieved medical business revenue of +10.4% year-on-year to 6.54 billion yuan (including comparable standards for Liao Jian and Jiang Neng). 23H1 hospital operations returned to normal, and the number of outpatients and hospitalizations, and average consumption increased.
The revenue of 23H1 hospitals in stock was +10.8%, and the revenue of Liaojian and Jiangneng hospitals was +9.6% yoy.
The hospital's profit contribution increased significantly, with a profit contribution rate of 12.3%. The total profit contribution of 23H1 hospitals was +32.5% year-on-year to 803 million yuan (including the comparable caliber of Liaojian and Jiang Neng). Of these, the number of hospitals in stock was +23.1%, and Liaojian and Jiang Neng were +46.6%. The profit contribution rate of 23H1 hospitals was 12.3%, +2.1ppt year on year, of which the number of hospitals in stock was 10.1%. 23H1 Head Hospital's revenue and profit margins have performed well. The medical business revenue of both Jiangong Hospital and Brain Hospital has increased by 26%, and the profit contribution of several leading hospitals under Liao Jianjiangneng has clearly increased.
Profit forecasting and investment ratings. Liao Jianjiang Energy joined the list in '23, and the operation of its hospitals resumed. In the future, with the hospital's refined management and group operation, it is expected that profit margins will tend to increase. Net profit for 23-25 is estimated to be 771 million yuan, 859 million yuan, and 963 million yuan, respectively. China Resources Medical has rich experience in hospital management, integrates with the controlling shareholder China Resources Health, strengthens resource collaboration, integrates member units, and drives two-wheel growth through continuous mergers and acquisitions and improving the operating efficiency of existing hospitals. Referring to the valuation of comparable companies, combined with the liquidity of Hong Kong stocks, the PE was given 12 times in 23 years, corresponding to a reasonable value of HK$7.84 per share. Maintain a “buy” rating.
Risk warning. The growth of its hospitals and the integration of acquired hospitals fell short of expectations; the subsequent acquisition process fell short of expectations; the risk of hospital impairment, etc.