First-quarter results began to recover, and profitability may reach an inflection point for the whole year
The company released its 2024 quarterly report, achieving operating income of 375 million yuan, a year-on-year increase of 7.76%, and realized net profit of 12.36 million yuan, an increase of 19.03% year-on-year, after deducting non-net profit of 9.66 million yuan, an increase of 51.52% over the previous year. 2024Q1's revenue from sales of goods and services was 246 million yuan, an increase of 5.83% over the previous year. The company's operating pace has gradually recovered, and its profitability may reach an inflection point throughout the year. Maintaining the profit forecast, as the company's operations resume in 24 and the pressure on accounts receivable and goodwill gradually ease, we expect the company's net profit to be $2.65/3.50/453 million yuan in 2024 to 2026, respectively. Referring to the comparable company Wind, an average of 29.8 times 24PE, considering the accelerated promotion of the company's new Hi-HIS products over 24 years, the company was given 32 times 24PE with a target price of 5.51 yuan, maintaining the purchase rating.
The gross margin remained stable, and the overall expense ratio showed a downward trend during the period
2024Q1's gross margin was 51.61%, which was basically the same year on year. Sales/management/R&D rates were 8.73%/16.41%/18.20%, respectively. The year-on-year change was -0.57/-2.85/0.77pct, and the overall cost ratio for the period showed a downward trend. The company has strengthened the new technology direction and cooperated with the Computer Innovation Research Institute of Zhejiang University to authorize the use of the Zhejiang University Medical Knowledge Bank and Huikang-Qizhen Medical Model. Currently, the Huikang-Qizhen model has achieved training and fine-tuning from 6B (6 billion) to 13B (13 billion) models. It can provide models of different sizes for different product scenarios, and provide offline and online deployment methods. While expanding the categories of edge AI support, it opens up a full AI link from the cloud to the edge.
Feiyuekang CareSync was officially released. It is expected to provide new momentum for the company's performance growth. On April 18, the company and Philips joined forces to officially launch the Feiyuekang CareSync integrated smart hospital information system, adhering to the patient-centered and clinical-needs-oriented design concept, which takes the patient journey as the main line, covering data production, collection, storage, processing, analysis, insight, and end-to-end solutions to fully meet the medical service needs of individual hospitals, medical groups, medical consortia and medical communities. The company and Philips will collaborate deeply on the channel and product side, using incremental customers and channels provided by Philips to promote collaborative sales of the company's medical information technology products and Philips medical equipment, strive to break the ice with new products and new businesses, and bring a new growth engine to the company's business development. Philips has begun pre-sales work for the Feiyuekang CareSync project with a number of hospitals, which is expected to provide new impetus for the company's performance growth.
Top hospital groups go one step further, and Hi-his products are being promoted at an accelerated pace
On March 5, the company and Suzhou Municipal Hospital officially signed a strategic cooperation agreement. The two sides will jointly use the new opportunity of “one hospital and six districts” to promote the construction of “smart hospitals”, be demand-oriented, promote the integration of clinical, medical technology, case and management systems, achieve resource integration and process optimization in each hospital area, reduce operating costs, improve service quality, work efficiency and management efficiency, and jointly build an efficient, convenient and safe medical informatization platform. Following Taizhou Enze Medical Center Group, the company's new Hi-his products once again entered the top hospital group, and its leading edge in the industry continued to be verified.
Risk warning: Hi-HIS promotion fell short of expectations; government payment capacity was insufficient; market competition intensified.