Key points of investment
Recently, Nanwei Medical released its 2023 three-quarter report. In the first three quarters of 2023, the company achieved operating income of 1,745 million yuan, an increase of 15.42% over the previous year; realized net profit of 387 million yuan, an increase of 70.31% over the previous year; realized net profit of 377 million yuan, an increase of 74.43% over the previous year; and achieved net operating cash flow of 359 million yuan, an increase of 136.10% over the previous year. The Q3 quarter of 2023 achieved operating income of 598 million yuan, an increase of 8.41% over the previous year; realized net profit of 122 million yuan, an increase of 19.70% over the previous year; and realized net profit of 119 million yuan after deducting non-return net profit of 119 million yuan, an increase of 22.29% over the previous year.
Profit forecasting and ratings: As the penetration rate and penetration rate of endoscopic diagnosis and treatment in China continue to increase, the value of the company's products for early screening for gastrointestinal cancer is gradually becoming prominent, and sales of this type of product are expected to continue to expand as the industry grows; future channel sinking to the grassroots level will also raise the “ceiling” of the industry; the gradual release of new products, including the visual product line, will bring new perspectives to the company's performance growth; and with the continuous improvement of the company's overseas product pipeline and the continuous deepening of marketing reforms, overseas revenue contributions are expected to continue to grow, and we are optimistic about long-term company development. We have adjusted the company's profit forecast. The 2023-2025 EPS is expected to be 2.69 yuan, 3.35 yuan, and 4.25 yuan; corresponding to the closing price on November 2, PE is 32.6, 26.1, and 20.6 times, respectively, maintaining the “increase in holdings” rating.
Risk warning: New product sales fall short of expectations, risk of changes in the international trade environment, risk of industry policy changes, risk of exchange rate fluctuations, etc.