Incidents:
On April 19, 2024, Diri Healthcare disclosed its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 1,378 million yuan, +12.96% year over year; realized net profit of 276 million yuan, +5.26% year over year; realized net profit without return to mother 262 million yuan, +5.36% year over year.
2024Q1 achieved operating income of 663 million yuan, +99.60% year over year; net profit to mother of 122 million yuan, +56.73% year over year; net profit without return to mother of 119 million yuan, +55.53% year over year.
Strengthening channel empowerment, reagent dosage is worth looking forward to
By product, in 2023, instrument products achieved revenue of 821 million yuan, +19.89% year-on-year; reagent products achieved revenue of 550 million yuan, +4.62% year-on-year, accounting for 39.94% of reagents. The company introduced a series of measures to empower channels, strengthen cooperation with large-scale domestic distributors with abundant resources, and drive steady product growth. In 2024, the company will optimize and adjust the sales team and distributors' reagent sales performance evaluation ratio, focusing on key markets and reagent demand side. It is worth looking forward to an increase in the share of reagents.
Continuing to increase overseas, with major customer strategy+localization management upgrades driving high growth in the international market. Looking at regions, the domestic market achieved revenue of 831 million yuan in 2023, +3.31% year over year; the foreign market achieved revenue of 547 million yuan, +31.61% year over year, and the share of international revenue increased from 34.08% in 2022 to 39.7%. The company focuses on key national markets, launches major customer strategies, and promotes the construction of overseas warehousing and logistics centers. At the same time, the operations of many subsidiaries have achieved the expected results. Among them, Russia, Indonesia, India and other places have achieved remarkable growth, and overseas markets are expected to maintain impressive growth.
Changes in product structure are expected to drive increased profitability
In 2023, the company's gross margin was 50.53%, -1.46pct year on year, of which instrument gross margin was 33.99%, -0.82pct year on year, and reagent gross margin was 75.42%, +0.65pct year on year. We believe that as reagent increases gradually, gross margin is expected to increase further. The company's net interest rate was 20%, -1.45pct year on year; sales expenses ratio was 18.17%, +3.17pct year on year; management expense ratio was 4.23%, -1.58pct year on year; R&D expense ratio was 9.33%, -0.08pct year on year.
Profit Forecasts and Investment Ratings
The company's performance increased significantly in 2023 and 2024Q1. We believe that with the increase in reagents and the rapid growth of the international market, the performance is expected to continue to grow steadily. Operating revenue for 2024-2025 was raised from $2310/3.03 billion to $2,30.36 billion, and the 2026 revenue forecast was $3,849 million; the net profit forecast for 2024-2025 was raised from 418/558 million yuan to $433/570 million, and the net profit forecast for 2026 was 743 million yuan. Maintain a “buy” rating.
Risk warning: risk of product sales falling short of expectations, risk of policy fluctuations, risk of overseas market promotion falling short of expectations