Incidents:
On August 24, the company released its 2023 annual report. In the first half of 2023, the company achieved operating income of 649 million yuan, an increase of 45.24% over the previous year, net profit of 74.27 million yuan, an increase of 43.88% over the previous year, after deducting net profit of 72.19 million yuan from non-return home, an increase of 50.20% over the previous year. In the second quarter of 2023, we achieved revenue of 404 million yuan in a single quarter, up 66.66% year on year, net profit of 51.92 million yuan, up 53.18% year on year, after deducting net profit of 50.25 million yuan from non-return income, up 64.23% year on year.
Reviews:
Expense rate control was good during the period, and R&D investment remained stable
2023H1's gross profit margin was 37.58%, a slight year-on-year decrease of 2.66 percentage points, a year-on-year cost ratio of 22.15%, a year-on-year decrease of 6.44 percentage points, of which the sales expense ratio was 8.38%, a year-on-year decrease of 3.05 percentage points, a year-on-year decrease of 3.05 percentage points, a year-on-year decrease of 2.65 percentage points, and an R&D expense ratio of 5.88%, a year-on-year decrease of 0.78 percentage points.
The performance of the intelligent manufacturing sector increased steadily. Technological upgrades and marketing innovation increased core competitiveness. In the first half of 2023, the company's intelligent manufacturing business segment revenue reached 512 million yuan, an increase of 53% over the previous year, and net profit attributable to shareholders of listed companies was 42.1712 million yuan, an increase of 40% over the previous year. In the first half of 2023, the company launched the first intelligent detection product “online near-infrared spectrometer”, which further enriched its product system and played an important role in closed-loop management of the pharmaceutical process automation control. In addition, the company has further strengthened its technology marketing system, cooperated with research institutes to launch a new “DP-EPC” model, enhanced its ability to control and undertake major projects, thus further enhancing the company's core competitiveness.
Rehabilitation medical products were improved and upgraded. Industry-university-research projects helped expand the product system. In the first half of 2023, the company's rehabilitation medical equipment business revenue reached 137 million yuan, an increase of 22% over the previous year, and net profit attributable to shareholders of listed companies was 3,0991 million yuan, an increase of 50% over the previous year. In the first half of 2023, the company continued to improve and upgrade its physical therapy and exercise therapy product systems. Long Zhijie, a subsidiary of the company, added 7 new registration certificates and filing certificates, and 2 registration certificates and filing certificates are under application. At the same time, the company cooperated with South China University of Technology and other universities to establish intelligent rehabilitation laboratories and carry out a number of industry-university-research projects, which is expected to help the company launch new products and enrich the company's product system.
The urban business is growing steadily, and the rural division's business is rapidly expanding
2023H1, the company signs contracts with agents in line with the business development model for urban and rural divisions and conducts regular training. As of June 2023, the rural division's business has covered 10 provinces and cities in Guangdong, Guangxi, Hubei, Jiangxi, Sichuan, Chongqing, Hebei, Shandong, Hunan and Jiangsu. The company plans to achieve rapid product promotion based on model projects and channel support.
Profit forecast: We expect the company's operating income from 2023-2025 to be 11.77/13.94/1,642 billion yuan respectively, and net profit to parent to be 1.69/2.22/288 million yuan respectively, maintaining the “buy” rating.
Risk warning: the risk of increased market competition, falling short of expectations in technology development, and shortage of talents