Main points of investment

It continued to improve in one quarter, and the loss accelerated and narrowed. The company has ploughed the medical industry for more than 20 years, has accumulated rich experience in the construction and operation of private general hospitals, and has two major hospitals, namely, high-tech hospitals and international medical center hospitals (including Beiyuan). A high-level medical and health service platform covering "serious medical care + consumer medical care" is constructed. In the first half of 2023, the company's revenue and return net profit were 22.10 yuan and-222 million yuan respectively, an increase of 106.9% and 62.7% respectively over the same period last year. The high growth was mainly due to the accelerated increase in the volume of diagnosis and treatment after routine operation. In the single quarter of Q2, the company realized revenue and return net profit of 11.51 yuan and-148 million yuan, with year-on-year growth rates of 50.8% and 11.8%, respectively. Throughout the year, the volume of diagnosis and treatment has increased quarter by quarter, and the company's revenue has grown rapidly. Shangluo Hospital has released a table this year, and the whole is expected to achieve a monthly break-even within the year.

High-tech hospital: quickly recover to full load operation, business continues to improve. In the first half of 2023, plastic Hospital, Vertigo diagnosis and treatment and pelvic floor Rehabilitation Center were established in Hi-Tech Hospital, and urology was expanded into two wards; medical breakthroughs were achieved, including the first artificial heart implantation, the first aortic valve balloon dilatation, the first Shockwave vascular shock wave technique for coronary artery calcification, the first "thyroid nodule radiofrequency ablation" and the first "endoscopic gastrostomy". In the first half of 2023, the income of high-tech hospitals reached 711 million yuan, an increase of 89.0% over the same period last year, and the net profit was 34 million yuan, an increase of 140.3% over the same period last year, mainly due to the rapid repair of the volume of diagnosis and treatment and the return of high-tech hospitals to full-load operation. Of these, the number of outpatient and emergency visits was 543500, an increase of 71.9 percent over the same period last year; the number of hospitalizations was 30500, an increase of 98.1 percent over the same period last year; the number of operations was 8669, an increase of 92.1 percent over the same period last year; and 25900 physical examinations, an increase of 70.4 percent over the same period last year. The highest daily volume of outpatient and emergency services was 4952, and the highest number of hospitalized patients was 1599.

Central hospital: quasi-consumer medical hospital district trial operation, development into the fast lane. In the first half of 2023, 32 new departments were opened in the International Central Hospital, with the trial operation of the North Hospital of ten specialized hospitals, such as plastic surgery, rehabilitation and obstetrics, and the general practice map of the whole life cycle of the International Medical City was established. In the first half of 2023, the central hospital achieved an income of 1.425 billion yuan, an increase of 123.0% over the same period last year, and a loss of 154 million yuan, which was 54.8% lower than that of the same period last year. With the rapid rise in the volume of diagnosis and treatment, the central hospital is expected to accelerate the realization of break-even. Among them, the central hospital (South Hospital + North Hospital) had a total of 524600 outpatient and emergency services, an increase of 163.5 percent over the same period last year; 55400 inpatient services, an increase of 123.4 percent over the same period last year; 26200 operations, an increase of 104.7 percent over the same period last year; and 24800 physical examinations, an increase of 89.3 percent over the same period last year. The highest daily number of outpatient and emergency services was 4525, and the highest number of hospitalized patients was 3307. All indexes showed a doubling trend.

Investment suggestion: the company is a general hospital operation group, actively developing a comprehensive medical innovation business model of "serious medical care + consumer medical care" to meet the multi-level and diversified medical needs of our country. With the rapid increase in the volume of diagnosis and treatment in the central hospital, we estimate that the company's revenue from 2023 to 2025 will be 44.55,62.44 and 8.24 billion yuan respectively, and the net profit will be-4.26,1.50 and 423 million yuan respectively.

Risk tips: medical reform control fees exceed the expected risk, management and operation risk, the risk of shortage of medical resources.