Incident: The company released its 2024 quarterly report, and the results slightly exceeded expectations.
In 24Q1, the company achieved operating income of 687 million yuan, up 0.04% year on year; net profit of 138 million yuan, up 0.06% year on year, up 182% month on month; net profit without return to mother of 130 million yuan, up 6.64% year on year, up 251% month on month; gross profit margin of 49.6%; net profit margin to mother and net profit margin without return to mother were 20% and 19% respectively, increasing 9 pct and 11 pct, respectively. As revenue increased and cost reduction and efficiency continued, the company's rate rate improved dramatically during the period, and profitability returned to normal.
Q1 The company has grasped structural opportunities in the industry, while new businesses continue to develop rapidly.
The 24Q1 company grew 0.04% year on year and 51% month on month under high base pressure in 23Q1. Compared with Q2 and Q3, which achieved high growth of 18% and 24% respectively in Q2 and Q3 in 23, the business recovery trend was obvious, mainly due to:
(1) Focus on grasping the structural recovery and development opportunities of the industry. In 24Q1, the company's life sciences sector achieved revenue of 350 million yuan, an increase of 79% over the previous month. Focus on laboratory construction opportunities. From automated sample banks and smart laboratories to pharmaceutical process user scenarios, solutions are becoming more and more diverse and extended to core scenario applications. During the same period, the medical innovation sector achieved revenue of 334 million yuan, an increase of 31% over the previous period. It closely follows new medical infrastructure, public health rehabilitation, and continuous blood/plasma station recovery opportunities to serve vaccine city networks such as Guizhou and Henan and automated blood station user scenarios in Tibet and Shanghai; automated medication solutions break through high-end users such as Zhejiang University's Shaw Hospital and Zhongshan People's Hospital.
(2) Continuous scientific and technological innovation supports the accelerated development of new industries. In 24Q1, the company's non-storage product serialization layout continued to be improved, and the application of automation in life science and medical innovation scenarios continued to expand; new industries accounted for 39% of revenue, up 22% year-on-year, and 36% month-on-month, further consolidating the new pattern of multi-category development. The company maintains high investment in R&D, continues to innovate and iterate, and accelerate the launch of new product solutions. In the first quarter, the company launched new product solutions such as light/mold incubators, floor-standing high-speed refrigerated centrifuges, and fully automatic cell culture workstations in the field of life science. Laboratory consumables such as cultivation and centrifugation continue to be abundant; in the field of medical innovation, it launched new product solutions such as generic drug dispensing robots and small ampoule dispensing robots.
The company's ability to face users in domestic and foreign markets continues to be strengthened, and overseas business is expected to be further boosted in the future.
In 24Q1, the company achieved revenue of 499 million yuan in the domestic market, up 11% year-on-year and 80% month-on-month; continuing to promote market segmentation and decline, and enhance the synergy of various business lines. Overseas markets achieved revenue of 186 million yuan. Although overseas revenue declined year-on-year due to issues such as project business execution cycles, it achieved a 6% month-on-month increase. It is expected that with the gradual transformation of the backlog of projects, the overseas market's performance will rebound next this year.
Investment advice:
Buy-A investment rating, 6-month target price of 43.27 yuan. We expect the company's revenue growth rates from 2024 to 2026 to be 26.4%, 25.0%, and 23.5%, respectively, and net profit growth rates of 35.5%, 25.3%, and 25.1%, respectively, with outstanding growth; maintaining the investment rating given to Buy-A, the target price for 6 months is 43.27 yuan, which is equivalent to a dynamic price-earnings ratio of 25 times that of 2024.
Risk warning: Uncertainty in medical industry policies; uncertainty about the release of new products; uncertainty about overseas business.