Matters:
On April 13, 2024, the company released its 2023 annual report: operating income of 1,616 billion yuan, up 5.81% year on year; net profit to mother of 37 million yuan, down 13.93% year on year; deducted non-net profit of 34 million yuan, down 27.44% year on year.
Commentary:
The company's revenue has maintained a steady growth trend, and the customer structure continues to be optimized. In 2023, the company achieved operating income of 1,616 billion yuan, a year-on-year increase of 5.81%; realized net profit of 37 million yuan, a year-on-year decrease of 13.93%; deducted non-net profit of 34 million yuan, a year-on-year decrease of 27.44%. Although objective factors had a certain impact on the release of industry orders in the second half of 2023, the company's revenue showed a steady growth trend. During this period, the company successfully obtained 29 software orders over 10 million in the fields of smart hospitals and public health, with a total amount of nearly 500 million yuan. Judging from the customer composition, new and old customers accounted for 37% and 63% respectively, and the customer structure continued to be optimized.
Hi-his has entered a new stage of nationwide promotion, and the order amount has increased significantly over the same period last year. Hi-HIS is based on a domain-driven design, which can greatly improve the efficiency of customized development. In terms of specific applications, for the first time in China, the company's overall solution for the three major hospital groups and the overall information system solution of Yunhua Hospital was fully launched in the “Four Hospitals and Five Areas” in Enze, Taizhou, involving 262 sub-projects in 7 categories, including smart services and smart clinical services, with a total of 90+ systems and 200+ modules. Hi-HIS significantly improved the response speed of the business system: the response time of the doctor station and nursing station was only 1/10 of the original system; the service item retrieval performance for medical order processing was increased by more than 3 times, and the average response time was reduced to less than 200ms. In 2023, the company signed 22 Hi-HIS-related orders, and the order amount increased significantly over the same period last year.
Partnering with Philips to explore ecological integration is expected to bring a new growth engine for business development. The company and Philips have officially unveiled the CTAsy1.0 electronic medical record product Feiyuekang CareSync. The company and Philips will collaborate deeply on the channel and product side, using incremental customers and channels provided by Philips to promote collaborative sales of the company's medical information technology products and Philips medical equipment. Currently, Philips has started pre-sales work for the Feiyuekang CareSync project with a number of hospitals. In addition, the company and Philips have reached strategic in-depth cooperation on “medical technology support”, and have successively promoted the product integration of “self-developed products+Philips cooperative products” to meet the needs of customers at different levels and provide more comprehensive and complete high-quality “medical technology support” solutions for different types of customers. Deep collaboration with Philips is expected to bring a new growth engine to the company's business development.
Investment suggestions: Countries have successively introduced various policies such as regulatory standards, incentives and support, etc., and the medical and health information industry is booming. The company is in the first tier of domestic medical and health information software suppliers and is expected to continue to benefit from policy promotion. We expect the company's revenue for 2024-2026 to be RMB 1,898, 22.52 and RMB 2,683 million, respectively, and net profit to mother of RMB 1.61, 2.27, and 309 million yuan, respectively. Referring to comparable company valuations, considering the company's dominant position among medical and health information software suppliers, the company was given 45 times PE in 2024, corresponding to a target price of 4.50 yuan, maintaining a “recommended” rating.
Risk warning: Industry competition intensifies; downstream demand release falls short of expectations; collaboration process is uncertain.