Incident: The company released its 2023 annual report. In 2023, it achieved total revenue of 10.01 billion yuan, an increase of 7.9%; net profit to mother of 650 million yuan, an increase of 30.8% over the previous year; net profit after deducting non-return to mother of 620 million yuan, an increase of 23.2% over the previous year.
Product structure optimization, steady performance growth. In 2023, the company's revenue increased 7.9% year on year, focusing on the two main businesses of medical device manufacturing and pharmaceutical equipment products. The revenue achieved by the company's medical device manufacturing products and pharmaceutical equipment products increased to 61.49% of revenue in 2023, an increase of 4.22% year on year, and an increase of 16.84% compared with 2020. The company's 2023 revenue for medical device manufacturing products was 4.167 billion yuan, up 9.15% year on year. Among them, experimental technology products increased 28.7% year on year, surgical instrument products increased 14.47% year on year; pharmaceutical equipment product revenue in 2023 was 1.922 billion yuan, up 26.73% year on year.
Strengthen cost control and continue to improve profitability. The company's gross margin in 2023 was 27.4%, up 1.1 pp year on year. The main reason is that the company continued to optimize its product structure. Among them, the gross profit margin for medical device manufacturing products was 40.82%, and the gross profit margin for pharmaceutical equipment products was 27.12%, while the operating income of medical trade products declined for two consecutive years since '22, and fell 0.07% year on year in '23. The company's sales expenses/management expenses/financial expenses/R&D expenses in 2023 were -0.45/+0.23/+0.33/ -0.25pp, respectively. The company continued to optimize the structure, reduce costs and increase efficiency.
Investment in R&D has been increased, and the international market is developing rapidly. In 2023, the company spent 443 million yuan on R&D, and continued to increase R&D investment. The company applied for 419 patents in 2023, including 87 invention patents. It was selected as a national intellectual property superior enterprise, and was selected as one of the top 500 Chinese enterprises with patent strength for three consecutive years. At the same time, the company adheres to a domestic and international “double cycle”. In 2023, the company achieved international business revenue (self-operation) of 24.1.2 million yuan, an increase of 55.36% over the same period last year, and the gross margin of international business reached 50.94%. Along with the continuous improvement of the company's product quality and the steady growth of international orders, the company can expect future revenue growth in the international market.
Profit forecasting and investment advice. The company's net profit due to mother in 2024-2026 is estimated to be 850 million yuan, 1.09 billion yuan, and 1.31 billion yuan, corresponding PE is 13, 10, and 8 times, respectively. It is recommended to keep an eye on it.
Risk warning: Risks such as cost control falling short of expectations, core product sales falling short of expectations, and overseas business expansion falling short of expectations.