Brief comment on performance

On October 24, 2023, the company released its third quarterly report of 2023. In the first three quarters of 23 years, the company realized income of 7.317 billion yuan (+ 10%), net profit of 579 million yuan (+ 38%), and non-return net profit of 555 million yuan (+ 28%).

3Q23 realized income of 2.244 billion yuan (+ 1%) in a single quarter, net profit of 120 million yuan (+ 23%), and non-return net profit of 144 million yuan (+ 76%).

Business analysis

It has achieved remarkable results in reducing costs and increasing efficiency, and its profitability has risen steadily. In the first three quarters of 23, the company's gross sales margin was 27.68% (+ 2pct), net sales margin was 8.28% (+ 2pct), and profitability rose steadily. The company's operating indicators are healthy, the expenses remain stable during the period, and the decline in financial expenses is mainly due to the realization of interest income of 21 million yuan (+ 145%).

Consolidate the core main business of medical devices and pharmaceutical equipment, and enrich the product line of new products. The steady growth in revenue in the first three quarters of 23 years is mainly due to the increase in revenue from medical devices and pharmaceutical equipment products. On September 18, 23, the dual-mode high-speed continuous BFS products independently developed by the company were officially put on the market, which is the first domestic enterprise to produce continuous BFS equipment. The product has the characteristics of high speed, high material utilization and so on. The production capacity of dual-mode continuous 1-2ml can reach 45000pcs/h, and the number of multi-mold continuous moulds can reach 20 sets. The material utilization rate of dual-mode high-speed continuous BFS equipment is up to 80%, and the material cost of a single product is greatly reduced. High-speed equipment can improve enterprise production efficiency, high material utilization rate and reduce cost. BFS equipment has been successfully replaced by domestic ones on the market, contributing new momentum to the long-term development of the pharmaceutical equipment sector. In addition, the company's IM-100 oral implant machine has obtained the medical device registration certificate, and the product line has been further enriched.

The combination of industry, university, research and application to promote industrial development. In September, 23, the medical equipment practice training base of China Medical equipment Association was officially unveiled in the company. The continuous deepening of the industry-university-research model has further promoted the technological progress and industrial development of medical equipment.

Earnings forecast, valuation and rating

We are optimistic about the development of the company's medical device manufacturing and pharmaceutical equipment business in the future. we expect the company's return net profit from 2023 to 2025 to be 7.46,8.74 and 1.096 billion yuan respectively, an increase of 49%, 17% and 25% respectively. EPS is 1.60,1.87,2.35 yuan respectively, and the current price corresponds to 14,12,9 times of PE, maintaining the "buy" rating.

Risk hint

The risk of lifting the ban on restricted shares, the lower-than-expected investment in fund-raising projects, the lower-than-expected risk of newly signed orders, the less-than-expected risk of overseas expansion, the risk of unstable supply of raw materials, and so on.