Incident: The company released its 2023 performance forecast. During the reporting period, it achieved operating income of 600 to 640 million yuan, an increase of 96.39% to 109.49% over the previous year; net profit to mother of -2.70 to -180 million yuan, which turned into a year-on-year loss. Among them, the fourth quarter achieved operating income of 250 to 290 million yuan, an increase of 150.68% to 190.79% over the previous year, and achieved net profit of -1.78 to -88 million yuan.
The medical business is growing steadily, and the photovoltaic business contributes revenue. In 2023, the company's medical informatization and medical service business continued to grow and maintain stable profitability. Sales of photovoltaic cells led to a significant increase in revenue scale, but losses occurred throughout the year due to large upfront investment in new businesses and declining price fluctuations in the PV industry chain, which had an impact on the company such as impairment.
With the signing of a large-scale supply agreement, it is expected that TopCon cells will gradually be released. The company's 9GWTopCon battery production capacity was put into operation in the second half of 2023, with a conversion efficiency of 26.07%. At the end of January 2024, the company signed a TopCon battery contract with Syraf Energy to supply 770 million cells to Syraf Energy, with a total contract amount of about 2,922 billion yuan. The company's photovoltaic business is progressing smoothly. We expect the company's TopCon cell shipments in 2024/2025 to be 6/9 GW, respectively, to help the company's performance grow.
Deepen medical informatization and reproductive medicine services, and promote AI technology to empower medical businesses. In terms of medical informatization, as of the end of June 2023, the company's end users covered 32 provinces and more than 2,100 medical institutions, including more than 800 of the top three hospitals. In terms of reproductive medicine medical services, the company Mary Hospital was founded in 2011 and obtained an assisted reproduction license in 2015. The assisted reproduction medical industry has high barriers, and licenses are scarce. In 2018, the company and the Suzhou Research Institute of the Institute of Automation of the Chinese Academy of Sciences jointly established the Zhongke Medi Artificial Intelligence Research Institute to focus on artificial intelligence research on intelligent anesthesia robots, critical care early warning robots, and cardiovascular “Harvey” doctors, and promote the empowerment of AI technology in the company's medical informatization and other businesses.
Investment advice: We expect the company's revenue in 2023-2025 to be 6.22/29.27/4.196 billion yuan, and net profit to mother - 2.19/1.92/287 million yuan, covered for the first time, giving it a “buy” rating.
Risk warning: PV competition intensifies, company sales fall short of expectations, cross-border business risks.