In 2023, revenue increased 35.71%, and net profit to mother increased 49.13%. The company achieved revenue of 1,650 billion yuan in 2023, an increase of 35.71% year on year, net profit of 534 million yuan, an increase of 49.13% year on year, after deducting non-net profit of 468 million yuan, an increase of 45.54% year on year. In 2023, Q4 achieved revenue of 437 million yuan, a year-on-year increase of 32.80%, net profit to mother of 131 million yuan, an increase of 34.11% year-on-year, after deducting non-net profit of 108 million yuan, an increase of 21.78% year-on-year.

The volume of 3D electrophysiology surgeries increased by more than 200% year on year, and domestic alternatives to electrophysiology accelerated. In 2023, the company's revenue of electrophysiological products was 368 million yuan, an increase of 25.51% over the previous year. Domestic electrophysiology products were added to more than 300 hospitals, covering more than 1100 hospitals. At the same time, the domestic electrophysiology business was upgraded from traditional two-dimensional surgery to three-dimensional surgery as scheduled, and a good 3D product market brand was established. The company completed more than 10,000 cases of 3D electrophysiology surgery in more than 800 hospitals, and the number of surgeries increased by more than 200% over 2022. Currently, the company's adjustable 10-pole coronary sinus catheter maintains a leading share in this category market segment, and the adjustable curved sheath tube has completed the admission of more than 200 centers through volume procurement projects.

The inpatient penetration rate of vascular interventional products continues to increase, and OEMs continue to grow well. In 2023, the company's coronary pathway revenue was 791 million yuan, up 38.98% year on year; peripheral interventional product revenue was 256 million yuan, up 40.36% year on year. The coverage rate and inpatient penetration rate of the company's vascular intervention products have further increased. The number of patients admitted to the product has increased by more than 600 compared to the end of 2022, with an overall coverage of more than 3,600 hospitals. Among them, peripheral admissions increased by more than 30%, and the coronary line increased by nearly 20%. Meanwhile, in 2023, the company's OEM product revenue was 210 million yuan, an increase of 31.67% over the previous year; the revenue for non-vascular interventional products was 0.16 million yuan, which is the company's newly laid out urinary system product line.

Overseas revenue increased 72.62% year over year, with independent brands driving overseas growth. In 2023, the company's international business showed a good growth trend. Overseas revenue reached 234 million yuan, an increase of 72.62% year on year. Among them, the Middle East, Africa and the CIS region increased by more than 100% year on year, while other regions achieved steady growth. In 2023, the company's international business accounted for 14.26% of the main business revenue, which further increased. From a product line perspective, PCI's own brands and EP's own brands are the driving sources of international business growth.

Profit forecasting and investment advice. We expect the company's net profit to be 6.97 billion yuan, 9.10 billion yuan and 1,199 million yuan respectively in 2024-2026, and EPS of 10.43, 13.61, and 17.93 yuan/share, respectively. The company is a typical innovative R&D platform company. Based on the huge room for future development on the track where it is located and the company's high growth trend, we gave the company 45-50 times PE in 2024, a reasonable value range of 469.40-521.56 yuan/share, and gave it a “superior to the market” rating.

Risk warning: The price reduction in collection increases the risk, the risk of new product development falling short of expectations, the risk of product release falling short of the expected risk, etc.