Incidents:
The company released its 2023 annual report, achieving full year revenue of 4.444 billion yuan (yoy +0.05%), net profit to mother of 1,217 billion yuan (yoy +4.28%), and net profit of non-return to mother of 1,185 billion yuan (yoy +5.86%).
In 2024, Q1 achieved revenue of 1,089 million yuan (yoy +5.09%), net profit of 324 million yuan (yoy +33.93%), and net profit of non-return to mother of 314 million yuan (yoy +33.15%).
Steady growth of multiple production lines
In 2023, the company achieved reagent revenue of 3.815 billion yuan (yoy +8.06%), of which revenue for immunodiagnosis, microbiological testing, and biochemical testing was 2,483 million yuan, 323 million yuan, and 250 million yuan respectively, with year-on-year increases of 23.77%, 18.65% and 20.54% respectively. Instrument revenue is 482 million yuan (yoy -32.99%). The decline in instrument product revenue is mainly due to strict compliance policies and supervision, and the installation process has slowed down, but demand for terminal diagnosis and treatment is just needed, and it is expected to usher in restorative growth in the future.
Improved profitability, leading the innovation R&D industry
The company's overall gross margin in 2023 was 65.07% (+5.23pct), mainly due to the increase in the share of high-margin reagent products, reaching 85.85% (+6.37pct). Net margin was 27.55% (+0.79pct).
The company continues to increase investment in innovation, with a R&D cost rate of 14.77% (+1.97pct), and continues to launch products such as the automated biochemical analyzer AutoChem B801 and the genetic sequencer Sikun2000. In terms of medical laboratory intelligence, the company launched the “Antu BioBioAutoLab Intelligent Laboratory Overall Solution”.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 5.392 billion yuan, 6.629 billion yuan and 7.764 billion yuan respectively, with year-on-year growth rates of 21.35%, 22.93% and 17.14% respectively, and net profit to mother of 1,555 billion yuan, 1,896 billion yuan and 2,224 billion yuan respectively. The year-on-year growth rates are 27.73%, 21.95% and 17.24%, respectively, and the 3-year CAGR is 22.24%. In view of the steady increase in the number of light-emitting instruments installed in the company, it is expected to drive reagent release in the long term. Referring to comparable company estimates, we will give the company 27 times PE in 2024, with a target price of 71.62 yuan, maintaining a “buy” rating.
Risk warning: IVD collection price reduction falls short of expectations, terminal installation falls short of expectations, industry competition intensifies, etc.