On March 27, 2024, the company released its 2023 annual report. In 2023, the company achieved revenue of 1,187 billion yuan, +32% year on year; net profit attributable to mother was 492 million yuan, +38% year over year; realized net profit after deduction of 462 million yuan, +43% year on year;
On a quarterly basis, 2023Q4 achieved revenue of 299 million yuan, +29% year over year; net profit to mother of 104 million yuan, +86% year over year; realized net profit without deduction of 97 million yuan, +101% year over year.
The new product has driven high growth in intraoperative stents, and the international business is expanding smoothly. According to the division of business lines, the company's aortic stent business achieved revenue of 940 million yuan in 2023, an increase of +28% over the previous year; the intraoperative stent business achieved revenue of 132 million yuan, an increase of +55% over the previous year; and the peripheral and other types of business achieved revenue of 115 million yuan, an increase of +49% over the previous year. The number of patients admitted to the new Talos straight-tube thoracic aortic stent system and the Fontus branch intraoperative stent system are growing rapidly. At the same time, the foreign business achieved revenue of 82 million yuan, +56% over the same period last year. Currently, sales cover 31 countries, and the share of international revenue continues to increase.
Profit margins are rising steadily, and R&D investment continues to grow. The company's annual comprehensive gross margin reached 76.5%, +1.3 pct year on year; annual net margin reached 41.0%, +1.8 pct year on year, and profit margin increased steadily. R&D investment was 260 million yuan, +51.2% year-on-year, accounting for 21.9% of revenue. In 2023, the company made significant progress in all R&D pipelines, leading product layout and R&D progress in aortic, peripheral artery, peripheral venous, and tumor intervention core tracks. Innovative products will provide continuous impetus for long-term performance growth.
The net operating cash flow is abundant, and a high-percentage dividend plan has been announced. Net cash flow from the company's operating activities reached 558 million yuan in 2023, +67.3% year-on-year. The company also announced the 2023 profit distribution plan. It is expected to distribute a cash dividend of RMB 248 million (tax included), and the total cash dividend accounts for 50.40% of the company's net profit due to mother in 2023. The company attaches great importance to shareholder returns, and the long-term investment value is prominent.
We are optimistic about the company's competitiveness in the field of aortic and peripheral intervention. We expect the company's net profit to be 6.39 billion yuan, 8.16, and 1,066 billion yuan respectively in 2024-2026, up 30%, 28%, and 31% year-on-year. EPS is 7.73, 9.87, and 12.88 yuan, respectively. The current price corresponds to PE of 23, 18, and 14 times, maintaining a “buy” rating.
Health insurance fee control policy risks; risk of new product development falling short of expectations; risk of product promotion falling short of expectations; risk of overseas trade friction.