Deeply involved in IVD for many years, China Resources joined the company to open a new chapter
Established in 1992, Dirui Medical has been deeply involved in the in vitro diagnosis industry for more than 30 years. Starting with urine analysis, various product lines have been continuously introduced in recent years, and seven major business segments have become the driving force for the company's long-term sustainable development. The company's products span the global market, have been sold to more than 120 countries and regions, and continue to promote the construction of a global sales and service network. In 2020, China Resources Industrial Fund joined the company to comprehensively expand and optimize the company's R&D and sales system. Driven by capital empowerment, the company continued to maintain a high growth rate in the first three quarters of 2023, with operating income of 1,049 million yuan and net profit of 234 million yuan, up 30.69% and 20.35%, respectively.
The company has a broad layout in the IVD field, and high-end instruments are quickly released
According to the forecast of the China Business Industry Research Institute, China's in vitro diagnosis market will grow from 169.8 billion yuan in 2023 to 242.8 billion yuan in 2027, with a compound annual growth rate of 7.4%. Dirui Medical comprehensively lays out the seven major IVD segments and continues to increase its installed capacity. In the first half of 2023, instrument revenue reached 434 million yuan, an increase of 64.21% over the previous year. With the increase in instrument share, reagent revenue is expected to usher in rapid growth. Looking at the segment segment, the company has leading competitiveness in the field of urine analysis, and the business is expected to grow steadily; the competitiveness of high-speed biochemical analyzers is strong, and the market share is expected to continue to increase; the chemiluminescence base is low, accelerating import substitution, and has become a new growth point; the LA-60 system drives the integrated laboratory business and continues to contribute to performance growth in line with localization policy support.
The overseas sales system continues to be optimized, and the business is expanding rapidly
With the increasing improvement of the company's IoT platform business layout, the company has been deeply involved in overseas markets for more than 20 years, has stable sales channels and brand influence, and has continuously strengthened marketing and business development.
The company's overseas revenue has grown rapidly in recent years, reaching 241 million yuan in the first half of 2023, a year-on-year growth rate of 29.87%. At present, the company's products have been sold to more than 120 countries and regions around the world, and has established a complete sales and service network around the world, and is expected to continue to expand overseas markets.
Investment advice and profit forecasting
The company has strong competitiveness in the field of in vitro diagnostics and is leading in self-developed product technology. It is expected that next year's reagent release, and the instrument business will continue to grow rapidly and accelerate import substitution. It is estimated that in 2023-2025, net profit attributable to the company's parent company shareholders will be 326, 4.08, and 514 million yuan, respectively, and EPS will be 1.19, 1.48, and 1.87 yuan/share, corresponding PE will be 21, 17, and 13 times, respectively. First coverage, giving a “buy” rating.
Risk warning
Risk of R&D falling short of expectations, risk of product price reduction, risk of deteriorating competitive landscape, risk of poor synergy effects, etc.