Core views:
The company's 23-year performance was in line with expectations, and strategic transformation and cost reduction and efficiency achieved substantial efficiency growth.
According to the company's performance report, in 2023, the company is expected to achieve total operating revenue of 2,416 billion yuan (YOY +22.00%); net profit of 487 million yuan (YOY +47.31%), mainly due to the full recovery of domestic hospital terminal diagnosis and treatment demand in 23, and elective surgeries that have been greatly affected by the epidemic have also recovered rapidly. The company's main business, including digestive endoscopy consumables, is clearly in demand. At the same time, the company is actively promoting strategic transformation, shifting from focusing on scale to focusing on efficiency, concentrating resources to develop the second growth curve, and seizing opportunities for industry recovery to achieve qualitative growth through open source, efficiency improvement, and cost reduction, and achieve phased results, increasing corporate profits. In the first three quarters of '23, net profit attributable to shareholders of listed companies increased by 44.01% compared to the previous period, without considering the impact of share payments. For the 23Q4 alone, the company is expected to achieve revenue of 671 million yuan (YOY +12.2%) and net profit to mother of 100 million yuan (YOY -18%).
The US and Germany obtained the certification centrally. According to the company's quarterly report for the 3rd quarter of '23, the company received certification in the US and Germany. Among them, 5 products were approved in the US and 22 products were certified in Germany. The company's overseas product line layout was further advanced, and the overall layout was more comprehensive. In particular, there were relatively few certified products in the early stages of the US market. We believe this certification will further promote the US direct sales market in the future.
Profit forecasting and investment advice. EPS is expected to be 2.60 yuan/share, 3.24 yuan/share, and 4.04 yuan/share in 23-25, respectively. As a leader in the field of digestive endoscopy consumables, the original product base is stable, and there is great potential for subsequent visualization products; due to the recent marginal easing of device collection policies, early valuation suppression and elimination, the 24-year PE 25X was given, corresponding to a reasonable value of 80.94 yuan/share, maintaining a “buy” rating.
Risk warning. Sales fall short of expectations, R&D progress falls short of expectations, policy impacts.