Maintain an increase in holdings rating. The company released a quick performance report. In 2023, it achieved revenue of 2,416 billion yuan (+22%), net profit to mother of 487 million yuan (+47.31%), and net profit of non-return to mother of 464 million yuan (+54.86%). The performance was in line with expectations. Considering the limited impact of collection, EPS was raised to 2.59/3.28/4.11 yuan in 2023-2025 (originally 2.49/3.13/3.87 yuan), considering the downward shift in the sector valuation center, and 2024PE27X was given, and the target price was lowered to 88.56 yuan to maintain the increase rating.
2023Q4 revenue grew rapidly, and profits slowed in stages. 2023Q4 achieved revenue of 670 million yuan (+43%), net profit attributable to mother of 100 million yuan (-3%), and net profit of non-return to mother of 86 million yuan (+4%). 2023Q4 revenue showed a high growth rate due to the low base and gradual recovery in the number of surgeries. Profit slowed in stages, and the net interest rate to mother was 15%. It is expected to be mainly affected by high accrual expenses and exchange losses in the fourth quarter of each year. The net profit margin for the full year of 2023 reached 20.2% (+3.5pct), which is expected to continue in 2024 due to the rise in gross margin due to the gradual increase in the scale effect and the decline in the expense ratio due to the company's stricter cost control.
Hemostasis collection is expected to have limited effect. According to the statistics of hospital reports from the Hebei Provincial Health Insurance Administration, the company received 43,000 and 736,000 hemostasis clips of 13 mm or more and 13 mm respectively, accounting for about 8% of the company's sales volume in 2023 (based on consistent estimates of tourniquet sales and total revenue growth), yet the revenue share of hemostatic clips in 2022 was less than 40%. Through multi-category layout and continuous overseas travel, the impact of this collection on the company's performance is relatively limited.
Overseas growth is expected to grow rapidly in 2024. Since 2023, overseas private brands and direct sales channels have experienced rapid growth. As registration certificates are gradually fully equipped, the overseas share is expected to continue to increase.
Risk warning: Product commercialization fell short of expectations, and volume procurement price reductions exceeded expectations.