On April 25, 2024, the company released the 2023 Annual Report and the 2024 First Quarter Report. In 2023, the company achieved revenue of 1,922 million yuan, -23% year on year; net profit of 436 million yuan, year-on-year; realized net profit of 409 million yuan, -50% year over year; 2024Q1 achieved revenue of 744 million yuan, +30% year over year; net profit to mother of 285 million yuan, +45% year over year; realized net profit without return to mother of 271 million yuan, +43% year over year.
Sales growth resumed in the first quarter, and demand for hemoperfusion products was strong. By product in 2023, the company achieved revenue of 1,468 million yuan, or -27.5%; blood purification equipment achieved revenue of 235 million yuan, +19%; disposable plasma bilirubin adsorbers achieved revenue of 91.87 million yuan, -20%; and hemodialysis powder achieved revenue of 56.59 million yuan, or -24% year-on-year. The company's business decline in 2023 was mainly affected by multiple factors such as a phased contraction in industry demand, policy adjustments in the medical industry, increased competition among peers, changes in the company's product sales structure, the reduction in the company's HA130 product prices, and the short-term pain of internal changes within the company. In 2024, the company's overall revenue in Q1 achieved a 30% growth rate. Among them, hemoperfusion devices and adsorber products achieved sales revenue of 692 million yuan, an increase of 85.51% over the previous year, and demand for core products recovered significantly.
Maintaining high investment in R&D, progress has been made in domestic and international product registrations. In 2023, the company invested 245 million yuan in R&D, accounting for 12.76% of the company's total revenue. Four new product registration certificates were added domestically: pHA series hemoperfusion devices, hemodialyzers (low-pass series), continuous renal replacement therapy pipelines, and plasma separators. Among them, the pHA series is the world's first approved haemoperfusion product that can simultaneously remove protein-binding toxins and medium- to macromolecular toxins from patients with end-stage kidney disease. In February 2024, the company's main products, hemoperfusion devices (HA series) and plasma bilirubin adsorbers (BS series), obtained EU MDR certification. They are the first domestic hemoperfusion products and plasma bilirubin products to pass the MDR certification of the latest EU medical device regulations. Future new products are expected to gradually expand their sales contribution growth.
We are optimistic about the company's future development in the field of blood purification. We expect the company's revenue in 2024-2026 to be 34.56 billion yuan, 45.74 billion yuan, and 5.681 billion yuan, respectively; net profit to mother will be 9.90, 14.73, and 1,875 billion yuan respectively, +127%, +49%, and +27%. The PE corresponding to the current price is 19, 13, and 10 times, maintaining the “increase” rating.
Risk warning
New product development risks falling short of expectations; risk of product promotion falling short of expectations; risk of increased competition in the industry; risk of impairment of goodwill and overseas assets.