Matters:
The company released its annual report for the year 23, with operating income of 2.120 billion yuan (+20.29%), net profit attributable to mother of 454 million yuan (+22.88%), after deducting non-net profit of 442 million yuan (+29.52%). In the fourth quarter of a single year, the company's revenue was 652 million yuan (+27.58%), net profit attributable to mother was 134 million yuan (+7.57%), after deducting non-net profit of 121 million yuan (+3.43%).
Commentary:
Endoscopy growth continues to be high, and ultrasound growth is steady. By product line, the company's color supermarket business revenue was 1,223 million yuan (+13.28%) in '23, maintaining steady growth. Revenue from endoscopes and endoscopic treatment devices was 850 million yuan (+39.02%), which continued to grow at a high rate. Following the launch of the 50 and 60 series high-end ultrasound platforms, the company released a new generation of high-end ultrasound platforms, the S80/P80 series in 23, which will help the ultrasound business enter the high-end application field.
In the field of endoscopy, the company launched the HD-580 series endoscope in '23. Compared with the HD-550 series endoscopes, this product greatly improved image quality and clinical detail performance, and “mirror control plus image quality” all reached the leading level of domestic production. In addition, the company's SV-M4K100 series hard lenses were certified, and several new surgical research and development projects were launched; self-developed endovascular ultrasound products were officially launched, and successfully selected in the inter-provincial alliance collection project at a higher price than similar products in the industry.
Overseas business is developing steadily to enhance operational stability. By region, the company's foreign revenue in '23 was 939 million yuan (+18.24%), accounting for 44.31% (-0.76pct) of total revenue; domestic revenue was 1,181 million yuan (+21.97%), accounting for 55.69% (+0.76pct) of total revenue. At present, the company has established a marketing network covering nearly 170 countries and regions around the world in the international market, and continues to strengthen localized operations. The good development of overseas business has enhanced the stability of the company's operations and performance, and has also opened up space for the continuous growth of the company's business.
The increase in the share of revenue from the endoscopy business led to an increase in profitability. The overall gross margin of the company in '23 was 69.41% (+2.54pct), of which the gross margin of the Caichao business was 65.88% (+0.21%), accounting for 57.68% (-3.56pct) of total revenue, and the gross margin of the endoscopic and endoscopic treatment equipment business was 74.42% (+4.85pct), accounting for 40.10% (+5.40pct) of total revenue. The increase in gross margin of the endoscopy business and the increase in its share led to an increase in the company's overall gross margin. The company's sales expense ratio for 23 years was 24.73% (+0.72pct), the R&D expense ratio was 18.12% (-0.54pct), the management expense ratio was 6.05% (+0.49pct), the financial expense ratio was -2.11% (-0.41pct), and the net sales margin after deduction was 20.87% (+1.49pct).
The company's various business developments are generally in line with the business plan. The product line gradually expanded from internal medicine to “internal medicine+surgery”, from diagnosis to “diagnosis+treatment”, and from equipment to “equipment+consumables”, and a multi-product line development pattern was initially formed.
Investment advice: In 23, the performance was slightly lower than expected due to the blocking of product admission. We expect the company's net profit to be 5.9, 7.5, and 960 million yuan (the original forecast values for 24-25 were 650 million yuan and 8.4 million yuan, respectively), an increase of 29.8%, 27.4% and 27.1% year-on-year, and EPS was 1.37, 1.74, and 2.22 yuan, respectively, corresponding to PE 27, 21 and 17 times, respectively. According to DCF model estimates, we gave the company a target price of about 52 yuan in 2024, maintaining a “recommended” rating.
Risk warning: 1. Product line growth does not meet expectations; 2. New product launch progress falls short of expectations.