Performance Brief
On January 26, 2023, the company released its annual performance forecast for 2023, which is expected to achieve net profit of 2,313 billion yuan to 2,472 billion yuan, +45% ~ +55%; net profit without return to mother of 1,813 billion yuan to 1,938 billion yuan, +45% ~ +55% year-on-year; looking at Q4 alone, it is expected to achieve net profit attributable to mother 122 million yuan to 281 million yuan, -73% ~ -39% year-on-year; realized net profit without return to mother of 143 million yuan to 268 million yuan, or -51% to -8% year-on-year.
Management analysis
Annual performance grew rapidly, and overall profit levels improved markedly. In 2023, the company's overall brand influence was further enhanced, including a continued increase in the market share of the respiratory treatment segment of oxygen concentrators and ventilator products. The diabetes care sector showed an accelerated development trend. The CT3 series of 14-day calibration-free CGM products was successfully launched on the market, and the sales trend is in line with good customer feedback. At the same time, with the expansion of market demand, the company's overall profit level increased significantly.
The sales results of Double Eleven were remarkable, and the CT3 series was successfully launched and promoted. The company has outstanding online channel sales capabilities. During the 2023 Double Eleven period, the company ranked first in online sales in the medical device industry, and won the first place in online sales in the Double Eleven medical device industry for the ninth year in a row.
Among them, blood sugar meters increased by more than 30% over the same period last year, and the domestic market share further increased. CGM Tolerant's sales amount exceeded 10 million, and its brand strength continued to increase.
The new employee stock ownership plan was released, demonstrating confidence in the company's future development. In September, the company announced a new employee shareholding plan and set net profit targets of 20.01 billion yuan, 20.31, and 2,339 billion yuan for 2023-2025, respectively, with year-on-year increases of 25%, 2%, and 15%, respectively. The net profit growth target shows the company's confidence in future business development, and is expected to fully mobilize the enthusiasm and creativity of core employees.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the company's potential in the three core tracks of respiratory oxygen production, blood sugar, POCT, and disinfection and sensory control. We expect net profit to be 23.95, 23.97, and 2,897 billion yuan respectively in 2023-2025, up 50%, 0%, and 21% year-on-year increases. EPS is 2.39, 2.39, and 2.89 yuan respectively. The PE corresponding to the current price is 14, 14, and 12 times, maintaining a “buy” rating.
Risk warning
Risk of new product development falling short of expectations; risk of product promotion falling short of expectations; risk of acquisition integration falling short of expectations; risk of overseas market expansion falling short of expectations; risk of goodwill.