Key points of investment
Incident: The company announced that in 2023, the company achieved operating income of 4.616-4.656 billion yuan and net revenue of 4.45-4.48 billion yuan after deduction. The company expects to achieve a net profit loss of 28—370 million yuan and a net profit loss of 401-491 million yuan after deducting non-return to mother. Based on this calculation, the company is expected to achieve revenue of 1,272-1,312 billion yuan in the 23Q4 quarter, an increase of 12%-16% over 23Q3; the 23Q4 quarter achieved net profit loss of 0.58 to 148 million yuan, net profit loss after deducting non-return to mother of 0.51 to 141 million yuan, and a median loss of 96 million yuan in 23Q4 net profit after deducting non-return to mother. Operating losses are expected to narrow compared to Q3. Total revenue for the full year of 2023 slightly exceeded our expectations, and the full-year loss was in line with our expectations.
The 2023Q4 quarter achieved relatively rapid revenue growth, and the two hospital bed peaks continued to reach new highs. As the company's newly built campus was put into operation and the number of beds continued to rise, the four quarters of 2023 achieved revenue of 10.59, 11.51, 11.34, and 12.92 billion yuan (median value in the Q4 forecast), respectively. The revenue for the single quarter showed an upward trend from month to month. Since 2024, high-tech hospitals and central hospitals have maintained a high level of bed operation and maintained a steady and positive business trend.
The 2023Q4 quarterly operating loss margin narrowed, and year-end expense accruals had a certain impact on apparent losses. The revenue scale of the 23Q4 quarter increased month-on-month. We expect high-tech hospitals to maintain a good profit level, and the loss margin of central hospitals will narrow compared to the 23Q3 quarter. Considering that there are certain annual expenses accrued at the end of the year, we estimate that the actual operating loss margin showed a narrowing trend compared to Q3. As the number of beds climbs in 2024 and the scale of revenue grows, the company's profit trend is expected to improve in the future.
Profit forecast and investment rating: We maintain the estimated total operating income of the company for 2024-2025 of 61.03/7.527 billion yuan, corresponding to the current market value of the PS of 2.4/1.9X; net profit to mother is estimated to be 2.87/546 billion yuan, and the corresponding PE valuation is 51/27X. Maintain a “buy” rating.
Risk warning: risk of bed climbing or falling short of expectations, risk of hospital profits rising or falling short of expectations, risk of losing core doctors, risk of policy uncertainty, etc.