Key points of investment

Recently, International Medicine released its three-quarter report for 2023. In the first three quarters of 2023, the company achieved operating income of 3,344 billion yuan, an increase of 74.70% over the previous year; realized net profit of 222 million yuan; realized net profit after deducting non-return net profit of 350 million yuan; and achieved net operating cash flow of 689 million yuan. Q3 of 2023 achieved operating income of 1,134 million yuan in a single quarter, an increase of 34.05% over the previous year; realized net profit of 63,800 yuan; and realized net profit of net income after deduction of net income of 95 million yuan.

Profit forecast and rating: The company is a leading large-scale integrated medical service group in China. It is gradually cultivating brand influence in the field of comprehensive medical services, and is also deploying special specialties such as medical aesthetics, assisted reproduction, and rehabilitation to meet the diverse and multi-level medical needs of the public. The company has completed initial capital investment. It is expected that with the gradual accumulation of the company's brand advantages, the volume of follow-up treatments and hospitalizations will continue to rise, which will drive the company's high-quality development. The 2023-2025 EPS is expected to be -0.09 yuan, 0.10 yuan, and 0.20 yuan; corresponding to the closing price on November 13, 2023-2025 PE is -, 96.0, and 45.8 times, respectively, maintaining the “increased holding” rating.

Risk warning: risk of hospital bed profitability falling short of expectations, risk of medical accidents, risk of industry policy changes exceeding expectations, etc.