Incident: The company released its 2023 annual report: in 2023, the company achieved revenue of 2,425 billion yuan, a year-on-year increase of 14.55%; net profit to mother of 745 million yuan, an increase of 2.02%; net profit after deducting non-return to mother of 695 million yuan, a year-on-year decrease of 1.14%; and net cash flow from operating activities of 675 million yuan, a sharp increase of 113.75% year on year.
Incident reviews:
Revenue increased quarterly throughout the year, and the revenue structure remained stable. In 2023, the company achieved revenue of 2,425 billion yuan, an increase of 14.55% over the previous year; net profit to mother was 745 million yuan, an increase of 2.02% over the previous year. On a quarterly basis, Q1-Q4 revenue for 2023 was 4.07/5.60/6.90/768 million yuan, respectively, with year-on-year growth rates of 1.26%/11.54%/15.87%/24.39%, respectively. By sector, the revenue of color sorters, medical equipment, and X-ray industrial inspection machines was 1,476/757 billion yuan respectively, accounting for 60.87%/31.17%/6.47% of revenue respectively, with year-on-year growth rates of 19.44%/5.51%/60.98%, respectively.
The color sorter boom remains the same, achieving rapid growth throughout the year. In 2023, the company's color sorter business achieved revenue of 1,476 billion yuan, a year-on-year increase of 19.44%; gross margin was 49.29%, a slight decrease of 0.17 PCT over the previous year, and remained stable. The company's color sorter products have been further improved in terms of color selection performance and reliability through engineering design+deep learning technology and built in intelligent chemical factories. The company continues to take advantage of technological research and development innovation, and is actively close to market demand, and domestic and foreign business continues to grow. In 2023, the company also released the first domestic Internet platform for the food and food industry, the Meiya Zhilian Industrial Internet Platform, which relies on the Internet of Things, cloud-side collaboration, deep learning, digital twins and other technologies to help food and food processing enterprises gradually automate equipment management, visualize operating data, refine cost control, and unmanned production and operation to better adapt to market development needs, strengthen enterprise market competitiveness, and promote the digital transformation of the rice processing industry.
The recovery of the dental industry has been delayed, and CBCT exports are beginning to take shape. In 2023, the company's medical equipment sector achieved revenue of 756 million yuan, a year-on-year increase of 5.51%, gross margin of 53.65%, a year-on-year decline of 2.22PCT; mainly due to adverse effects such as the slow recovery of the domestic dental industry and increased market competition.
During the Beijing Dental Exhibition in early June 2023, the company received 1,466 orders for dental CBCT units; at the same time, after recent years of overseas market layout, the company's dental CBCT exports have begun to take shape in 2023. In the first half of 2023, the company also officially released the “American and American Dental” oral health digital cloud platform. Currently, more than 3,000 customers have used it, which may increase the company's service performance in the future. In 2023, the company's self-developed spinal surgery navigation equipment successfully obtained a medical device registration certificate, marking that the company has made breakthrough progress in the field of high-end non-dental medical imaging. It is currently being promoted and applied in many hospitals. It has successfully completed dozens of spinal surgeries, and is progressing steadily towards mass market application. In February of this year, the company's self-developed mobile head CT also obtained a medical device registration certificate issued by the State Drug Administration, further enriching the company's medical product line.
The industrial inspection business continues to grow rapidly. In 2023, the company's industrial inspection business achieved revenue of 157 million yuan, a year-on-year increase of 60.98%, exceeding 100 million yuan for the first time. At present, the company's industrial inspection equipment has several series of products, including X-ray packaged food foreign matter detectors, radial tire X-ray inspection equipment, etc., which play an important role in ensuring the safety of industrial products. In 2023, the company continued to optimize existing products, continuously improve the technical level and stability and reliability of products through engineering design and intelligent production, and released a new X-ray detector for small and medium-sized packaging and bottled food. The deep learning and four-angle technology equipped with the equipment not only accurately identify and remove foreign objects, but also comprehensively improved the recognition range and detection efficiency, bringing a better user experience.
Investment advice:
We expect the company's net profit from 2024-2026 to be 859/9.78/1,078 million yuan, EPS of 0.97/1.11/1.22 yuan, respectively. The PE corresponding to the current stock price is 19/17/15 times. Considering that the company's color sorter business has maintained steady growth, continuous breakthroughs in the field of high-end non-dental medical imaging, future prospects, and rapid growth in the industrial testing business, we have maintained its “increase” investment rating.
Risk warning:
Color sorter boom is declining, domestic CBCT industry recovery falls short of expectations, industry competition intensifies, and new product promotion falls short of expectations