Event: the company released its third-quarter results report in 2023, with revenue of 6.259 billion yuan (- 19.36%), net profit of 1.353 billion yuan (- 25.22%), non-net profit of 1.286 billion yuan (- 28.75%) and operating cash of 604 million yuan (- 66.86%) in the first three quarters. In 2023, Q3 realized revenue of 1.958 billion yuan (- 19.38%), net profit of 392 million yuan (- 27.66%), and non-net profit of 381 million yuan (- 29.60%).
The apparent performance continued to be under pressure, and the innovation business grew steadily. Based on the high base of emergency products and changes in the policy environment in the same period, the company's apparent performance in the first three quarters is still affected. ① device plate: Q3 achieved revenue of 2.863 billion yuan (- 34%) in 2023, its central vascular implantation intervention innovation product portfolio increased by 6.08% year-on-year, surgical anesthesia business revenue increased by 6.91%; ② drug plate: Q3 revenue was basically flat, the first three quarters revenue year-on-year-5.92%; ③ medical services plate: Q3 revenue 980 million yuan. After deducting equity payment, the company's Q3 deducted non-net profit of 423 million yuan in 2023, an increase of 11.27% month-on-month to achieve operating net cash flow of 462 million yuan in June-September, basically eliminating the impact of pre-collection and refund of Q4 emergency products in 2022.
In the research and development of pipelines in an orderly manner, the layout of consumer business to cultivate growth potential energy. In 2023, Q1-Q3 spent 670 million yuan (+ 0.46%) on R & D, and 10.78% (+ 2.13pct) on R & D expenditure. The company's biodegradable PFO occluder and semi-automatic AED have been approved to go on the market, pulsed acoustic balloon and radio frequency atrial septal puncture system are in the pre-market replenishment stage, glargine insulin is expected to be approved soon, and Smeagrupetide is ready to declare IND. The phase 101I clinical trial of the three-target biological GLP-1 candidate drugs invested by the company is basically completed, and it is expected to be officially reported by the end of the year, and the phase II clinical trial will begin in Q1 in 2024. In addition, the company is actively accelerating the transformation to consumer business. At present, there are a number of product layouts in dermatology and ophthalmology, and the proportion of traditional Chinese medicine insurance sources of the company's income is less than 45% (excluding postharvest < 25%).
Investment suggestion: the company is a domestic platform cardiovascular leader, technological innovation promotes the continuous enrichment of production lines, basically out of the impact of collective mining, strategic layout in the field of consumer health care is expected to form a new growth pole. Taking into account industry policy changes and short-term effects such as collection, we have reduced the company's 2023-2025 net profit to 1.94925.21 billion yuan, compared with the same period last year. The year-on-year-11.53% PE is 29.38%, 24.26%, respectively, 1.04 and 1.34 times, respectively. The current stock price corresponds to 2023-2025, which is multiple of 16-13-10, maintaining the "recommended" rating.
Risk hint: the risk that the commercialization effect of the product is not as good as expected, the risk that overseas expansion is not as expected, and the risk that R & D progress is not as expected.