Performance grew rapidly in 2023, and demand for rehabilitation devices recovered strongly after the pandemic. In 2023, the company achieved revenue of 745 million yuan (+52.46%), net profit attributable to mother of 227 million yuan (+81.03%), and net profit of non-return to mother of 204 million yuan (+162.31%). Among them, 23Q4 had quarterly revenue of 203 million yuan (+53.73%), net profit attributable to mother of 48 million yuan (+47.36%), and net profit of non-return to mother of 39 million yuan (+79.21%).
In the first quarter of 2024, the company achieved revenue of 169 million yuan (+18.12%), net profit attributable to mother of 39 million yuan (+3.34%), and net profit of 36 million yuan (+12.07%) after deducting non-return to mother. The company seized the opportunity of recovery in demand for rehabilitation devices after the epidemic, actively developed the market, strengthened the marketing network layout and system construction, achieved strong growth in 2023, and continued the growth trend in the first quarter of 2024.
Rehabilitation physiotherapy, rehabilitation training, and rehabilitation assessment equipment were fully developed, and sales revenue in 2023 increased 56%, 48%, and 67% year-on-year respectively.
Profitability has increased, and expense rates have decreased. The gross profit margin for 2023 is 68.62% (+2.35pp), which is expected to increase the average sales unit price and increase profitability due to the company's promotion of product upgrades and iterations; sales expense ratio 22.81% (-5.96pp), management expense ratio 5.50% (-1.84pp), R&D expense ratio 14.33% (-4.58pp), financial expense ratio -4.00% (+1.45pp), four rate 38.65% (-10.93pp), net profit margin 30.50% (+4.81pp), due to scale effects As a result, the expense ratio continues to improve, and the net interest rate due to mother has increased.
The first equity incentive since listing was launched, demonstrating confidence in development. The company released the draft equity incentive plan for the first time since listing in July 2023. It plans to grant 1.8 million shares, accounting for 1.125% of the total share capital at the time; the incentive targets include 163 directors, executives, and core technical personnel, accounting for 9.57% of the total number of employees; the incentive target is not less than 50%/80% of the 2023/2024 revenue growth rate or no less than 70%/120% (based on 2022), indicating full confidence in future development.
Investment advice: The prosperity of the rehabilitation industry is expected to continue to improve. Xiangyu Medical leads in product strength and product richness, and has strong terminal coverage. It is expected to enjoy industry dividends and continuously increase its market share. Considering that the company continues to increase investment in R&D and sales, lower its profit forecast for 24 and 25, and add a profit forecast for 2026, it is estimated that 2024-2026 revenue will be 9.2/11.3/1.34 billion yuan (the original 24-25 year period was 9.5/1.18 billion yuan), with a year-on-year growth rate of 24%/23%/18%, net profit due to mother of 2.8/3.4/410 million yuan (previously 24-25 million yuan), 22%/20% year-on-year growth rate. The current stock price corresponds to PE = 21/17/14x, and the evaluation was raised The level is “buy”.
Risk warning: Risk of declining industry sentiment; equipment procurement amounts and progress falling short of expectations; market competition exacerbates risks; policy risks.