Under COVID-19 's high product contribution, 1H23 performance declined in a short period of time compared with the same period last year, maintaining a "buy" rating.
The company's 1H23 realized income of 4.3 billion yuan (yoy-19.4%), net profit of 960 million yuan (yoy-24.2%) and non-return net profit of 900 million yuan (yoy-28.4%), mainly due to the contribution of 1H22 COVID-19 related products. We maintain the profit forecast and estimate that the 23-25 net profit will be 2.902 billion RMB 2.902 billion RMB for the year 23-25. We give the company 17x PE for 23 years (the average Wind of the comparable company is 17x), adjust the target price to 22.15yuan (the previous value is 29.97yuan) and maintain the "buy".
Gross profit margin is steadily rising, still paying attention to sales promotion and new product research and development company 1H23 annual gross profit margin of 64.9% (yoy+2.8pct), we speculate that the company's regular product revenue contribution rebounded and its gross profit margin is relatively high. The annual sales / management / R & D expense rate of the company's 1H23 is 18.7%, 8.8% and 10.3%, respectively (yoy+3.3/+1.9/+2.0pct). The year-on-year increase in the company's expense rate is mainly due to the reduction of revenue contribution from unconventional products and the weakening of the dilution effect of the expense rate. The company continues to increase sales promotion and R & D investment to consolidate the foundation for long-term development.
Surgical anaesthesia business leads the growth and is optimistic about the steady development of 23 years. 1) equipment: 1H23 income 2.02 billion yuan (yoy-32.6%), mainly due to 1H22 COVID-19 related products contribution income base is higher. The company's surgical anesthesia business is developing rapidly, 1H23 is included in yoy+21.2%, 's cardiovascular intervention innovation products continue to promote, and 1H23 is included in yoy+13.3%. Looking forward to 23 for the whole year, considering the company's rich equipment categories and excellent performance, the conventional diagnosis and treatment continues to recover after the superimposed epidemic, and the optimistic sector will achieve good development; 2) drugs: 1H23 income 1.6 billion yuan (yoy-8.5%), we speculate that some products are mainly due to the impact of the failure of some products in drug collection in individual provinces, considering the company's continuous strengthening of product promotion, and optimistic that the sector income performance 2H23 has recovered. 3) Medical services and health management: 1H23 has an income of 690 million yuan (yoy+15.2%), which is optimistic that the sector will achieve accelerated development in 23 years.
Steady progress in R & D and innovation to further enrich product layout
The company is developing a wealth of products and is progressing smoothly: 1) Cardiovascular instruments: disposable radial artery compressors and disposable hemostatic sheaths have been approved for listing, pulsed sonic balloons and degradable PFO occluders have been registered, coronary artery rapamycin perfusion balloon, TAVR, mitral clamp repair system, peripheral stent, atrial fibrillation cryoablation system, renal artery denervation ultrasonic ablation system have entered the clinical stage. 2) Consumer medical products: 5 ophthalmic products such as soft hydrophilic contact lenses have been registered, 3 ophthalmic products such as multifocal intraocular lenses and 5 dermatological products such as polylactic acid dermis injection filler have entered the clinical stage, standard orthodontic metal brackets are in the type inspection stage, and orthodontic consumables such as double-layer TPU appliance and double / single-layer TPU diaphragm are in the development stage.
Risk hint: product sales do not meet expectations, research and development progress is lower than expected, product bidding price reduction.