Incident: The company announced its 2023 annual report. In 2023, it achieved operating income of 678 million yuan, an increase of 52.29% over the previous year; realized net profit to mother of 58 million yuan, an increase of 167.04% over the previous year.
The overall expense ratio was stable, and the net interest rate increased significantly. The company's management expenses rate in 2023 was 13.4%, a year-on-year decrease of 5.5 pct; the sales expense ratio was 34.3%, up 4.7 pct; the R&D expenses rate was 21.7%, the same as the previous year; and financial expenses were -0.4%, up 1 pct year on year. The company's gross margin in 2023 was 73.8%, up 4.1pct year-on-year. The company's net profit margin in 2023 was 9.0%, up 3.3 pct year-on-year.
AQ300 continues to be promoted, and deployment in tertiary hospitals is accelerating. By business, the company achieved revenue of 620 million yuan for endoscopy equipment in 2023, an increase of 58.63%; revenue of diagnostic and treatment consumables was 42.5724 million yuan, a year-on-year decrease of 13.73%; and revenue from endoscopy maintenance services was 12.3497 million yuan, an increase of 235.20% over the previous year. Among them, in terms of equipment, relying on the continuous promotion of the AQ-300 4K ultra-high-definition endoscopy system, the number of large-scale domestic medical terminal customers continues to grow, which has led to a steady increase in sales of high-end series products. In 2023, the number of high-end models and mirrors installed in tertiary hospitals (including winning bids) was 96 and 316, respectively, and installed in 73 level-3 hospitals (including winning the bid).
R&D investment increased, and new products continued to be released during the year. In 2023, the company released a number of new products: 1) Released a new UHD series of duodenoscopes, providing better support and services for ERCP diagnosis and treatment.
2) Release various microscopy products such as ultrafine endoscopes, ultrafine percutaneous biliary endoscopes, bronchoscopes, etc., to flexibly meet the diagnosis and treatment needs of different departments. 3) The new AQ-200 Elite endoscope system was released, further expanding the range of suitable endoscopes. 4) Release of the UHD series of bifocal endoscopes. Bifocal endoscopes are endoscopic devices used to diagnose and treat digestive diseases, enabling doctors to more comprehensively assess disease conditions and understand the overall state of the tissue in greater depth. 5) The release of a split upper gastrointestinal endoscope ensures the efficacy and efficiency of cleansing to the greatest extent.
Maintain a “buy” rating. Based on the strong competitiveness of AQ300 products, EPS is expected to be 0.86/1.39/2.19 yuan in the next three years, maintaining a “buy” rating.
Risk warning: R&D falls short of expectations; competition increases risk; new product promotion falls short of risk;