Event
On October 26, 2023, the company released its quarterly report for the third quarter of 2023, with revenue of 3.344 billion yuan in the first three quarters, an increase of 74.70% over the same period last year. The net profit of homing and deducting non-homing lost 2.22 yuan and 350 million yuan, respectively, reducing losses by 73.12% and 55.61% respectively. In the third quarter alone, the revenue was 1.134 billion yuan, an increase of 34.05% over the same period last year; the net profit of returning to the mother and deducting non-returning to the mother lost 6.4 and 95 million yuan respectively, reducing losses by 99.97% and 54.66% respectively over the same period last year. The performance is in line with expectations.
Comment
The number of hospitalized patients recovered strongly, and the revenue increased by 80% compared with the same period last year. The sale of Shangluo International Medical Center Hospital earned more than 100 million investment income. (1) the post-epidemic repair continued, and the company's revenue in the first three quarters and the third quarter increased by 74.7% and 34.05% respectively compared with the same period last year. The total number of outpatient and emergency services of the company in the first half of the year was 1.07 million (+ 82.99%) and the number of hospitalization services was 85900 (+ 96.57%). From the three quarterly reports, revenue continued to grow. (2) the company was examined and approved by the board of directors on October 21, 2022, and completed the sale of 99% stake in Shangluo International Medical Center Hospital on August 22, 2023. The company sold the former to Shangluo Transportation Investment and Construction Co., Ltd. at a price of 170 million yuan. This move will improve the company's asset structure and have a positive impact on the company's profitability and speeding up the pace of development. In the third quarter of 2023, the company also made an investment income of more than 100 million.
With the development of new departments and the continuous improvement of operating cash flow, it is worth looking forward to making a profit in a single month.
(1) the plastic hospital, vertigo diagnosis and treatment and pelvic floor rehabilitation center were set up in Xi'an High-tech Hospital in the first half of the year, and the urology department was expanded into two wards, and completed the first artificial heart implantation, the first aortic valve balloon dilatation, the first Shockwave vascular shock wave technique to treat coronary artery calcification, the first "thyroid nodule radiofrequency ablation" and the first "endoscopic gastrostomy". During this period, 54 new technologies and new projects were carried out (+ 80%), bringing in 33 talents of all kinds, including 9 professional titles above middle and senior level. (2) 32 new departments were opened in Xi'an International Medical Center Hospital in the first half of the year, of which 18 new departments were opened after the regional trial operation of the North Hospital. Xi'an International Medical Center made 80 new technological breakthroughs in the first half of the year, introducing 854 talents of all kinds, including 133 intermediate and above professional titles. (3) the substantial increase in revenue improves operating cash flow and gross profit, and is expected to make a profit in a single quarter. In the third quarter of 2023, the company's operating cash flow continued to grow 39.6% compared with the same period last year; the gross profit margin of sales in the third quarter was 10.93%, up from 7.76% in the first half of the year.
Earnings forecast, valuation and rating
We are optimistic that the recovery of the company's diagnosis and treatment traffic and the addition of many new departments will lead to performance growth. We increased the company's 2023 revenue by 43% to 4.2 billion from 3 billion, maintaining revenue of 567.9 billion yuan in 2024Universe in 25 years, and revenue in 2023-24-25 increased by 55%, 34% and 40% compared with the same period last year, and the net profit of the company was-2.96 Dynamis, 146,000,000 yuan. Maintain a "buy" rating.
Risk hint
Risks such as lower-than-expected profitability of beds, increased competition and the impact of medical policies.