Incident: The company released its 2023 annual report: The company achieved operating income of 274 million yuan (+34% year over year) and net profit of 15.41 million yuan (year-on-year reversal of loss to profit).
Comment:
Market demand is gradually recovering, and new products are progressing steadily: in 2023, the company's medical business achieved revenue of 227 million yuan (+30% YoY), and the industrial security inspection sector achieved revenue of 40.83 million yuan (+76% YoY). The company's new businesses, such as new energy battery testing, electronic inspection products, and intelligent DR solutions, are progressing smoothly. The dental sector and the pet medical field have driven steady business growth along with the increase in industry demand and the localization substitution process. The human medicine sector and security inspection business showed good recovery during the period when the company's product upgrades and customer demand restoration were promoted. In 2024, with the further expansion and strength of the company's sales side, the company's new products form strong support, and the company's business is expected to continue to grow and recover rapidly.
Adhere to global collaborative development, acquire 30% of ISDI's shares, and lay out high-end CMOS application fields: the company set up European (Italian) subsidiaries to further optimize the organizational operation structure, actively expand overseas markets using Korean subsidiaries, etc., and gradually improve the international marketing and service network system. The company completed the acquisition of 30% of ISDI's shares and strengthened its layout in the field of high-performance CMOS-X ray detectors and CMOS image sensors. The company's products and ISDI product technology form a strong complementary relationship, which helps the company further expand the application of products in the high-end market. At the same time, the company can introduce ISDI products for local production and sales in China to further enhance the company's profitability.
The equity incentive plan was released to show the company's confidence in development: the company released the 2024 restricted stock incentive plan (draft). The target of this incentive plan is no more than 17 people. The performance assessment A1/A2/A3 target is no less than 341/3.27/313 million yuan in 2024, and the cumulative revenue for the two years 2024-2025 is not less than 766.7.19/674 million yuan. The company's high A1 goal setting shows the company's confidence in future business development. At the same time, this incentive plan is also expected to motivate the company's employees. We are optimistic about the company's long-term development.
Profit forecast, valuation and rating: The company actively explores domestic and overseas markets, and has a large sales investment; there is more product research, R&D investment is high, and the overall cost rate remains high. We lowered the 24-25 net profit forecast to 2937/37.7 million yuan (down 13%/41% from the previous forecast), and the net profit forecast for the additional 26 years was 54.4 million yuan, EPS was 0.33/0.43/0.62 yuan, respectively. The current price is 38/30/21 times PE for 24-26, respectively. The company's revenue side maintained relatively rapid growth, and the profit side actively reduced costs and increased efficiency, and maintained a “buy” rating.
Risk warning: Industry growth falls short of expectations; market competition increases risk; company product development and sales fall short of expectations; international trade friction, etc.