Incidents:
The company released its annual results report for the year 23, achieving annual revenue of 2,425 billion yuan (+14.6%), achieving net profit attributable to shareholders of listed companies of 745 million yuan (+2.0%), and net profit attributable to shareholders of listed companies of 695 million yuan (-1.1%) after deducting non-recurring profit and loss.
Comment:
Profit performance declined slightly, and overall profitability remained steady. 1) Achieved a gross profit margin of 51.5% (-1.5pct) in 2023, achieving a net profit margin of 30.7% (-3.8pct), and achieved a net profit margin of 28.6% (-4.5pct) after deduction. The decline in profit margin was mainly due to the impact of the dental CBCT terminal price war and a slight increase in the cost structure, and overall profitability remained steady; 2) The company's period rate of 20.0% (+3.0pct), of which the sales/management/ R&D/ finance ratio was 11.7%/4.3%/6.1% /- 2.1%, +0.9/-0.8/+0.3/+2.5pct year over year. Increased sales investment is conducive to continuing to increase domestic market share while speeding up overseas market layout; increasing R&D expenses help product iteration and new product development, which is expected to consolidate the company's competitiveness in the long term.
Product side: New products continue to be introduced, and the product matrix in the medical equipment section continues to improve. 1) The color sorter section released a variety of new products, such as the industry-first UV color sorter, UHD deep learning color sorter, integrated plastic bottle sorting equipment, etc.; 2) The X-ray inspection section released a new X-ray inspection machine for small and medium-sized packaging and bottled food to comprehensively improve the scope of identification and inspection efficiency; 3) The medical equipment sector continues to iterate and upgrade and develop new products. ① Released a new high-end seated dental CBCT, with obvious advantages in terms of visibility, clarity, comfort, intelligence, and stability; ② Officially released the “American and American Dental” digital cloud platform for oral health to help achieve intelligent diagnosis and treatment; ③ 23Q1, spinal surgery navigation equipment obtained a medical device registration certificate, and the company made breakthrough progress in the field of non-dental high-end medical imaging; ④ 24Q1, mobile head CT obtained medical device registration certificates. The long-term performance potential of the medical sector is worth looking forward to.
The traditional machinery sector has maintained a relatively high growth rate, and the medical equipment sector is expected to contribute the second growth curve. 1) The color sorter segment has revenue of 1,476 billion yuan (+19.4%), and the X-ray inspection machine segment's revenue is 157 million (+61.0%). The company has established strong product advantages and brand barriers in traditional business fields, and the growth rate is expected to be maintained; 2) Continuously enriching the medical equipment product matrix and launching new products in the field of high-end imaging equipment and surgical navigation equipment. As commercialization of related products progresses, it is expected to contribute a second growth curve to the company.
Profit forecast and investment advice: The company is one of the leading companies in the dental CBCT field, and the product pipeline continues to improve. We expect the company to achieve revenue of 27.99/31.92/3.66 billion yuan and net profit to mother of 841/9.38/1,058 million yuan in 2024-2026, corresponding PE 19/17/15 times, respectively. Based on its advantages in the field of dental imaging equipment, the company expanded its business boundaries to the field of non-dental CT/surgical robots. The medical equipment sector layout was initially effective. It was optimistic about the company's long-term development expectations, covered for the first time, and gave it an “increase” rating.
Risk warning: Overseas expansion falls short of expectations, and market competition increases risk.