Performance Brief
On February 22, 2024, the company released its 2023 annual performance report. It is expected to achieve annual revenue of 2,416 million yuan, +22% year over year; net profit of 487 million yuan, +47% year over year; net profit without return to mother of 464 million yuan, +55% year over year; based on single Q4, it is expected to achieve revenue of 671 million yuan, +43% year over year; net profit of 100 million yuan, -3% year over year; net profit without return to mother.
Management analysis
Demand for endoscopic diagnosis and treatment has recovered, and annual performance has increased rapidly. In 2023, domestic hospitals fully recovered from terminal diagnosis and treatment, rapid recovery from elective surgeries, significant procurement demand for digestive endoscopy consumables, and progress was made in the promotion of new visual products. At the same time, overseas private brand sales have grown rapidly, and the global channel layout has expanded rapidly. In Q4, the company's revenue in a single quarter achieved a year-on-year growth rate of +43%, breaking through the highest quarterly revenue in history.
Profit margins have increased significantly, and the transformation of high-quality growth strategies has achieved phased results. The company's annual profit growth rate was significantly higher than the revenue growth rate, and profit margins continued to rise. The company is actively promoting strategic transformation, shifting from focusing on scale to focusing on efficiency. Through open source, efficiency improvement, and cost reduction, the company has achieved phased results, and profit margins are expected to increase further in the future.
The simultaneous expansion of visualization products at home and abroad is expected to contribute to the second growth curve in the long term. The company has a wide variety of visualization products, including disposable cholestoscopy and disposable bronchoscopes. The related products have obtained domestic, European, American and Japanese registration certificates. With the continuous development of corresponding technology and the continuous increase in application demand, the global disposable endoscopy market has huge potential and is expected to contribute to the company's second growth curve. In the future, the company's visualization products will also drive the use and sale of related consumables in hospitals.
Profit Forecasts, Valuations, and Ratings
We are optimistic about the company's development potential in the field of digestive endoscopy consumables and disposable endoscopy. We expect the company's net profit to be 4.87, 6.29, and 827 million yuan respectively in 2023-2025, up 47%, 29%, and 32% year-on-year. EPS is 2.59, 3.35, and 4.40 yuan, respectively. The PE corresponding to the current price is 27, 21, and 16 times, maintaining the “buy” rating.
Risk warning
Health insurance fee control policy risk; risk that in-hospital demand will not recover as fast as expected; risk that new product development will not meet expectations; risk that product promotion will not meet expectations; exchange risk.