Key points of investment:
The company released its 2023 annual report and 2024 quarterly report.
In 2023, the company achieved revenue of 509 million yuan (+37.0%), net profit attributable to mother of 217 million yuan (+49.9%), and deducted non-net profit of 212 million yuan (+48.4%).
2024Q1 achieved revenue of 112 million yuan (+23.4%), net profit attributable to mother of 52.78 million yuan (+54.2%), and deducted non-net profit of 48.27 million yuan (+41.4%).
The 23-year results were in line with expectations, and 24Q1 profits continued to rise.
The 2023 annual report is basically consistent with the revenue and profit side of the express report, achieving an overall gross profit margin of 70.9% (increase of 2.75pct) and a net profit margin of 42.7% (increase of 3.64pct). The cost of restoring the shares was 2.14 million yuan, and the mother was 219 million yuan.
The company's 24Q1 profit continued to increase, and the new Q1 production base was put into use. The company has automated assembly of multiple processes such as electric coils, biopsy pliers, and clip devices, driving the company's gross margin to continue to rise, achieving a gross profit margin of 71.8% and a net profit margin of 47.3%.
Domestic and overseas two-wheel drive, achieving impressive growth rates.
Domestic revenue reached 261 million yuan (+37.6%). By the end of 23, the number of domestic terminal hospitals exceeded 2,300, with a coverage rate of 44% for tertiary hospitals.
Overseas revenue of 245 million yuan (+36.8%) was achieved, 34 new overseas cooperative customers were added in '23, and private brand sales accounted for 23% (+6pct). With the launch of the company's European branch, overseas sales are expected to continue to grow at a high rate in the future.
The continued growth of high-margin GI products has led to a continuous rise in the company's gross margin.
By product, GI revenue of RMB 336 million (+34%), gross profit margin of 74.0%; EMR/ESD revenue of RMB 105 million (+51.4%), gross profit margin of 66.3%; ERCP revenue of 37.9 million yuan (+29.2%), gross profit margin of 61.5%; diagnostic equipment category: 27.53 million yuan (+39%), gross profit margin of 67.0%. The new replaceable hemostatic clip has obtained FDA, CE, and domestic registration certificates and is being sold.
Profit forecasting and investment advice
Based on the adjusted profit forecast based on regular reports, we expect the company's net profit to be $269/3.52/455 million for 2024-2026 (previously $26/347 million in 24-25), and a CAGR of 28.0%. Considering the technical advancement of the company's innovative bipolar products, it maintained a PE valuation of 27 times over 24 years, corresponding to a target price of 125.50 yuan, maintaining a “buy” rating.
Risk warning
Procurement policy risks; overseas private brand product promotion progress falls short of expectations; bipolar product marketing falls short of expectations.