Performance Brief
On January 15, 2024, the company announced its 2023 annual results forecast. It is expected to achieve revenue of 502 million yuan to 512 million yuan, +35% to +38% year over year; achieve net profit due to mother of 212 million yuan to 221 million yuan, +46% ~ +52% year over year; achieve net profit without deduction of 2.06 to 215 million yuan, +44% to +50% year over year.
Looking at Q4 alone, it is estimated to achieve revenue of 156 million yuan to 166 million yuan, +44% to +53%; realized net profit to mother of 69 million yuan to 77 million yuan, +44% to +62% year over year; realized net profit of 66 million yuan to 75 million yuan, +57% to +78% year over year.
Management analysis
Domestic hospital coverage continues to increase, and brand strength is rapidly improving. The company made good progress in its domestic and international business operations in 2023. The number of digestive endoscopic surgeries in China has recovered relatively quickly, and the coverage rate of the company's target hospitals has been further improved. New products such as replaceable hemostasis clips and bipolar high-frequency surgical equipment have been promoted smoothly, and channel capacity has been further strengthened. At the same time, overseas customer development efforts have been strengthened, and the number of customers and coverage areas have achieved good growth.
Expense investment efficiency has improved, and profit margins have further increased. In terms of cost management, the company continues to increase investment in R&D, further improving product performance, and is expected to launch a series of new endoscopic consumables products in 2024. At the same time, the company improved management efficiency. The annual sales expense ratio and management expense ratio remained at a reasonable level. The annual profit growth rate was higher than the revenue growth rate, and the overall profitability was significantly superior to the industry average.
The incentive plan highlights business confidence and sets a three-year high performance growth target. In 2023, the company awarded 391,500 restricted shares of the equity incentive plan to core employees for the first time. The incentive plan sets a high revenue and profit growth target for the three fiscal years 2023-2025, and the A level (100% ownership) sets a revenue target of 500/6.75/911 million, +35%/+35% YoY; a net profit target of 1.95/2.49/309 million, +35%/24% YoY, which is expected to fully motivate core key employees.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the company's development prospects in the endoscopic consumables industry. We expect the company's net profit to be 2.16, 2.82, and 363 million yuan in 2023-2025, up 49%, 31%, and 29% year-on-year.
EPS is 3.72, 4.87, and 6.26 yuan, respectively, and the current price is 34, 26, and 20 times PE, maintaining the “gain” rating.
Risk warning
Health insurance fee control policy risks; risk of developing projects falling short of expectations; risk of product promotion falling short of expectations; exchange risk.