Incident: Global Healthcare released its 2023 annual report. During the reporting period, the company's operating revenue/net profit to mother was 136.50/2.021 billion yuan, +13.1%/+7.0% year-on-year; ROE was 13.63%, -0.32pct year on year. The company is expected to distribute a cash dividend of HK$0.35/share, with a dividend payout ratio of 30%.
Comprehensive medical revenue growth is accelerating, and operational efficiency continues to improve. During the reporting period, the company's healthcare business revenue was 7.833 billion yuan, +22.9% year-on-year; of these, comprehensive medical revenue was 7.634 billion yuan, +20.5% year-on-year, and the revenue growth rate accelerated. By the end of the reporting period, the company had consolidated a total of 14,353 beds (excluding beds under internal planning and construction). The revenue for single beds was +10.1% to 510,000 yuan over the same period. The size of beds and the revenue of single beds continued to increase. Hospital operation efficiency improved. The number of diagnoses and treatments at various medical institutions (excluding nucleic acid) during the reporting period was +21.0% to 9.35 million, the average number of hospitalization days -0.5 to 10.1 days year-on-year, and the bed usage rate was +10pct to 90% year-on-year.
The volume of specialist medical care and health services has increased rapidly, and endogenous development+epitaxial expansion are being promoted collaboratively. During the reporting period, the company's specialty medical and health business achieved rapid growth, with revenue/net profit of 244.032 million yuan, +190.7%/+271.8% year-on-year; among them, the full-cycle equipment management business achieved leapfrog development, contributing 2.43 billion yuan to reported revenue/net profit of 2.4 billion yuan, +241%/+208% over the same period last year. The company accelerated business promotion and merger and acquisition plans. While serving internal and external hospital customers, it also successfully acquired Casixuanda and Shandong Tuozhuang during the reporting period, and acquired Shandong Qingniao Softong, a leading domestic smart health and pension company, in early 2024 to accelerate the digital transformation and layout of the medical field.
The financial business continues to play the role of ballast stone, and the financing structure has improved. During the reporting period, the company's financial business revenue/net profit was $58.82/1,745 billion yuan, +2.1% year-on-year. The financial business achieved steady growth as the company's ballast stone. As of the end of the reporting period, the company's net interest-bearing assets were 67.349 billion yuan, +3.2% year on year; net interest spread 3.16%, year on year - 51 BP; non-performing rate 0.98%, year on year - 1BP; provision coverage rate of 284.55%, +23.44pct year on year. Affected by the Federal Reserve's interest rate hike, the company's interest-bearing debt cost ratio was +28BP to 4.26% year on year, but the company promptly increased the early repayment of existing foreign currency loans, with a cumulative early repayment of about US$715 million, and the scale of foreign currency financing was steadily reduced. By the end of the reporting period, the company's USD+HKD interest-bearing debt was 9.145 billion yuan, or -35.6% year on year, accounting for 11.1pct to 19.2% year on year. The financing structure has improved.
Investment advice: The company's financial business is developing steadily, the profitability of the comprehensive medical business continues to increase, and the specialty medical and health business is beginning to expand, and performance growth is certain; the company expects to distribute a cash dividend of HK$0.35 per share, with a dividend rate of 8.2% corresponding to the latest closing price. The company's revenue for 2024-2026 is estimated to be 154.73, 17.6.28, 19.54 billion yuan, net profit due to mother of 22.68, 25.63, and 2,851 billion yuan, EPS of 1.20, 1.35, 1.51 yuan/share, and PE of 3.37x, 2.99x, and 2.69x corresponding to the closing price on April 2. Maintain a “buy” rating.
Risk warning: The pace of overseas interest rate cuts falls short of expectations, industry competition has intensified sharply, and asset quality has deteriorated dramatically