Incidents:
On March 27, 2024, Weigao Orthopedic issued the 2023 annual results announcement: in 2023, the company achieved revenue of 1,284 billion yuan, a year-on-year decrease of 37.63%. Net profit attributable to mother was 112 million yuan, a decrease of 81.3% over the same period.
Investment highlights:
The bid price for the product was ideal, and the company's market share is expected to continue to increase. In 2023, the company's three major brands of “Weigao Orthopedics”, “Jianli Bond”, and “Weigao Haixing” won bids for all categories of trauma system products such as intramedullary nails, and sports medicine products. The products quoted separately won bids at ideal prices, and the share of total demand increased significantly. In particular, the absorbable anchor product series made breakthrough progress in this volume procurement.
Optimize the product structure and expand the field of innovation. The company focuses on the field of orthopedics, continuously optimizes the product structure, and expands the field of innovation. The entire sports medicine production line has been verified, providing new growth points for the company's development; breakthroughs have been made in the research and development of new orthopedic materials; the layout of surgical equipment and new fields has been improved; and the indications for PRP products in the field of tissue repair have been actively expanded, and remarkable results have been achieved.
The company accelerates the introduction and launch of new products, enriches the product matrix, continuously improves and updates products, and enhances clinical use and customer satisfaction.
Refined digital transformation has significantly improved operational efficiency. The company focuses on lean production and PSI production, sales and inventory planning around the long-term strategy of “digital factory”. In terms of lean production, production efficiency and product quality have been improved through pilot projects and equipment management systems. In terms of PSI production, sales and inventory planning, demand management and delivery commitments have been optimized to ensure controlled delivery. Production cycles have been reduced by 30%, and the customer experience has been significantly improved.
Profit forecasts and investment ratings. We expect the company's revenue in 2024-2026 to be 1,515, 17.42, and 1,968 million yuan, net profit to mother of 249, 2.97, and 352 million yuan, corresponding PE of 42.95x, 36.02x, and 30.38x. As the company continues to focus on its core business, its innovative strength is gradually strengthened, and its product coverage is gradually comprehensive, and the drive for endogenous growth is continuously strengthened. For the first time, coverage was given, and a “buy” rating was given.
Risk warning. Risk of price reduction in collection, risk of sales falling short of expectations, risk of increased market competition, risk of commercialization of new products falling short of expectations, and industry policy risks.