Incident: Recently, the company released its annual report for 2023 and the first quarter report for 2024. In 2023, the company achieved revenue of 275 million yuan, an increase of 20.40% over the previous year; achieved net profit of 117 million yuan, an increase of 12.29% over the previous year; realized net profit of 115 million yuan without return to mother, an increase of 14.34% over the previous year. In the first quarter of 2024, the company achieved revenue of 758.1886 million yuan, a year-on-year increase of 13.56%, net profit to mother of 30.298 million yuan, an increase of 14.48% year-on-year, and net profit after deducting non-return net profit of 30.2653 million yuan, an increase of 14.23% year-on-year.
Comment:
The increase in demand for terminal medical care was compounded by the promotion of new products, and revenue and profit increased in 23 years: In 2023, due to factors such as the increase in demand for blood coagulation tests for diagnosis and treatment in terminal medical institutions and the entry into the market of SF-9200 fully automatic coagulation analyzers, etc., the company's revenue increased year-on-year. At the same time, driven by the increase in operating income, major indicators such as net profit attributable to shareholders of listed companies achieved varying degrees of growth in 2023. The company achieved both revenue and profit growth in 2023, mainly driven by increased demand from terminal medical institutions and the launch of new products into the market.
Continue to increase R&D investment to help new products continue to be launched: In 2023, the company invested 19.1773 million yuan in R&D, an increase of 13.21% over the previous year. In the first quarter of 2024, the company invested a total of 4.6951 million yuan in R&D, an increase of 23.18% over the previous year. In 2023, the company added 4 new authorized inventions and 6 utility model patents. In response to the demand for blood coagulation tests in domestic tertiary hospitals, the company actively accelerated the development process of new products such as coagulation blood flow lines, Anti-Xa, LA, etc., and obtained medical device registration certificates for new products such as antithrombin (AT) assay kits (chromogenic substrate method) with two different anticoagulant mechanisms, which can meet the needs of different clinical application scenarios. Furthermore, in 2023, in response to import substitution opportunities in large and medium-sized hospital user groups, the company made every effort to ensure that the SF-9200 fully automatic coagulation analyzer was put on the market. The product had excellent performance in terms of testing speed, degree of automation, accuracy, etc., and received good market feedback from users, laying the foundation for import substitution in the company's coagulation business.
Develop in-depth cooperation with dealers to expand coverage of medical institutions across the country: In 2023, the company covered markets in 29 provinces and key cities in the country other than Tibet, Qinghai, Hong Kong, Macao and Taiwan through regional dealers or general distributors. End users include tertiary hospitals, level-II hospitals and the following medical institutions. Market channels covering medical institutions at all levels across the country have been expanded through academic, product application and after-sales services for end users with regional distributors and other channel partners.
Profit forecast, valuation and rating: Considering the potential impact of industry competition and fee control policies on the company's business, we slightly lowered the company's 24-25 net profit forecast to 1.41 billion yuan (the original forecast was 144/190 million yuan, down 2.5%/10.3%, respectively), and introduced a 26-year net profit forecast of 206 million yuan, and the current price corresponding to 24-26 PE is 12 times 18/15/12 times. The company is a leading enterprise in the domestic in vitro diagnostic industry in the field of blood coagulation. We are optimistic that the company will accelerate domestic replacement in the field of blood coagulation and maintain the company's “buy” rating.
Risk warning: Single risk of main business, risk of new product development and launch falling short of expectations, exchange risk, risk of increased market competition, risk of product price reduction due to health insurance fee control.