1Q24 has excellent results, optimistic about the full year's performance
The company achieved revenue of 89,153 million yuan (yoy +71.0%) and net profit of 4.169 million yuan (net loss to mother of 9.326 million yuan in 1Q23). The company actively explores domestic and overseas markets, and the 1Q24 performance was impressive.
The company's 1Q24 gross margin was 60.5% (yoy-7.8pct). We estimate that the factory price of the company's products was adjusted after the collection was executed, but it has increased month-on-month (the company's 4Q23 gross profit margin 58.3%, qoq+2.2pct). The company's net operating cash flow in 1Q24 was 6.26 million yuan, which was corrected year-on-year, and the cash flow situation further improved. We maintain our profit forecast and expect EPS of 0.11/0.21/0.34 for 24-26. We used the DCF valuation method (assuming a WACC of 7.5% and a sustainable growth rate of 1.7%) to keep the target price of 35.63 yuan unchanged and maintain the “buy”.
Catheter products lead overall revenue growth, and we are optimistic that the business in each sector will maintain good development for 24 years 1) Catheterization products: We estimate that the 1Q24 sector's revenue will lead the overall growth. Considering that the company's products have been fully collected by the inter-provincial alliance and the implementation is currently progressing smoothly, the company's new high-end products (high-density calibration, pressure ablation catheters, refrigeration ablation systems, etc.) are expected to continue to be released. We are optimistic that the sector's revenue will continue to grow rapidly in 24 years; 2) Equipment products: We estimate that 1Q24 has performed steadily. Considering the excellent performance of the company's equipment products and the marginal recovery in market demand, we are optimistic that they will achieve positive development in 24 years; 3) Other products: mainly needle sheaths, which will continue to be released in 24 years as the company's 3D electrophysiological surgery volume grows rapidly.
Domestic promotion is making great strides, and overseas sales trends are improving
1) Domestic: We estimate that domestic revenue in 1Q24 increased by more than 100% year-on-year, mainly due to the volume of high-end products compounded by the low domestic revenue base in 1Q23. Looking ahead to the full year, we are optimistic that the company's domestic business revenue will continue to grow rapidly due to factors such as the release of high-end new products. 2) Overseas: We estimate that 1Q24 overseas performance was relatively stable (1Q23 overseas revenue base was relatively high). Considering that the company's market competitiveness continues to improve, and high-end new products such as superimposed pressure ablation catheters have been CE certified, we are optimistic that the company's overseas revenue will continue to grow rapidly for 24 years.
New product development and commercialization are progressing steadily, and the product matrix continues to promote new product development and commercialization, including: 1) pressure ablation catheters: more than 1,000 domestic surgeries have been completed in 23 years and CE certified in 8M23, which is expected to be further released in 24 years; 2) cryo-ablation: it has now completed more than 20 provinces, and is optimistic that it will continue to contribute to performance growth over 24 years; 3) PFA: It has now entered the follow-up phase, and the company is expected to be approved domestically in 25 years; 4) magnetic navigation robots; the company continues to deepen its domestic approval in 25 years; 4) magnetic navigation robots; Axis collaboration The company expects Stereotaxis's fifth-generation magnetic navigation robot and the magnetic navigation ablation catheter jointly developed by both parties to be approved domestically in '24; 5) RDN:
It has now entered the clinical trial stage, and the company expects it to be approved domestically in 25 years.
Risk warning: New product development risks, product commercialization risks, increased market competition risks.