The 2023 performance forecast was released, and revenue and profit grew rapidly. In 2023, the company expects to achieve revenue of 342-368 million yuan, a year-on-year increase of 30.40% to 40.31%; net profit to mother of 105-121 million yuan, an increase of 39.35% to 60.58%; net profit after deducting non-return to mother of 0.83 to 95 million yuan, an increase of 26.01% to 44.23% year-on-year. Revenue for the fourth quarter of a single quarter is expected to be between 128-154 million yuan, up 30.81% to 57.34% year on year; net profit to mother was 0.40 to 0.56 million yuan, up 25.98% to 76.18% year on year; net profit after deducting non-return to mother was 0.26 to 0.38 billion yuan, up 3.47% to 51.71% year on year. Results for the fourth quarter of 2023 continued to grow rapidly despite a high base for the same period in 2022.

Revenue from disposable consumables has increased steadily, and new products have been released smoothly. The company continues to strengthen sales expansion, continuously improve product recognition in domestic and foreign hospitals, and achieved a steady increase in disposable consumables revenue in 2023. At the same time, the company continued to increase investment in R&D, improve product performance, enhance product competitiveness, and continuously broaden the product matrix. New products such as endoscopes and energy surgery equipment achieved small volume growth in 2023.

New business lines such as endoscopes and energy surgery equipment continue to be improved. The company's ultra-high-definition endoscopic camera system has a complete self-developed imaging chain. It has a full line of independent design, development and production capabilities for “optical sight, light source system, and camera system”. Through continuous innovation and R&D, it has independently mastered the core technology related to energy surgery equipment, and launched a series of energy surgery equipment such as ultrasound bone tissue surgery equipment, plasma surgery equipment, and high-frequency surgery equipment. The company's energy surgery equipment and endoscopic system products can collaborate with surgical power devices to form an overall surgical solution to assist doctors in more systematic, accurate and efficient diagnosis and treatment in minimally invasive surgery.

Investment advice: The company's 2023 performance is expected to achieve rapid growth, raising the profit forecast. It is expected that 2023-25 revenue will be 3.5/4.8/6.4 billion yuan (originally 3.3/4.2/540 million yuan), a year-on-year growth rate of 35%/36%/33%, and net profit to mother of 1.1/1.5/20 billion yuan (previously 1.3/170 million yuan), with a year-on-year growth rate of 50%/35%/33%. The current stock price corresponds to PE = 44/32/24x. The company is a leading domestic manufacturer of surgical power devices. It has an outstanding market position. Traditional surgical power devices continue to be improved and upgraded, and the development of endoscopic systems and new technology platforms for energy surgery equipment is expected to open up new growth points.

Risk warning: risk of R&D failure; risk of increased competition; risk of regulatory policy.