1Q24 net profit grew rapidly year-on-year, and profitability continued to improve
The company's 1Q24 operating income/net profit attributable to mother/net profit excluding net profit of 10.21/4.26/399 million yuan, compared with the same period, was +16.6%/+20.0%/+25.5%. The company's profitability continued to improve, driving profit growth faster than revenue growth. We expect EPS of 2.63/3.39/4.25 yuan in 24-26 years. Considering that the company's mainframe installed capacity continues to expand, overseas revenue is growing rapidly, and profitability continues to improve, we gave the company a PE valuation of 32x in 24 (comparable to the average PE value expected by the company Wind in 24 to be 22x), adjusted the target price to 84.29 yuan, and maintained a “buy” rating.
The 1Q24 company's sales expenses ratio increased slightly year on year, and the gross margin significantly increased the company's 1Q24 sales/management/R&D/finance expenses ratio by 15.61%/2.87%/9.93%/-0.29%, +1.30/+0.48/+0.43/-0.65pct year on year. The gross profit margin for 1Q24 was 73.84%, +5.15pct year on year. We believe that gross margin increased year over year or that the share of reagent revenue due to high gross margin increased further.
Domestic revenue growth slowed slightly in 1Q24, and overseas revenue grew rapidly year-on-year. The company's 1Q24 domestic main business revenue was +12.17% year-on-year. Due to the short-term impact of external policy factors, domestic revenue growth slowed slightly year-on-year. We are optimistic that rapid growth will resume in the future. The company continues to increase the construction of key overseas markets. 1Q24 overseas main business revenue was +24.95% year-on-year. We are optimistic that overseas business revenue will continue to grow rapidly in the future.
1Q24 Reagent revenue is growing rapidly, and instrument installation continues to advance
The company's 1Q24 reagent revenue increased 26.42% year on year, and instrument product revenue decreased by 3.86% year on year.
In 1Q24, the company achieved sales and installation of 220 units of large-scale luminaires at home and abroad. We expect the proportion of installed domestic and overseas medium and large machines to continue to increase throughout '24. We expect to install about 1,800 domestic units in '24, including 800 large machines (X6+X8); we expect to install around 3,500 units overseas in '24.
Profit is expected to continue to improve and maintain the “buy” rating
We maintain our profit forecast. We expect net profit of 20.7/26.6/3.34 billion yuan for 24-26, up 25%/29%/25% year on year. The current stock price corresponds to the 24-26 PE valuation of 26x/20x/16x. We adjusted the target price to 84.29 yuan (previous value: 81.65 yuan) to maintain the “buy” rating.
Risk warning: Infectious disease projects fall short of expectations; overseas expansion falls short of expectations.