Introduction to this report:
2024Q1's performance is in line with expectations, and the growth rate is under pressure under pressure. The company's performance is expected to improve quarter by quarter as the base decreases, equipment renewal support, and bidding gradually ease.
Key points of investment:
Maintain an increase in holdings rating. In 20024Q1, revenue was 479 million yuan (+1.33%), and net profit to mother was 100 million yuan (-27.65%). The performance was in line with expectations. Maintain the 2024-2026 EPS forecast of 1.33/1.70/2.18 yuan, and maintain the target price of 49.21 yuan, corresponding to 2024 PE37X, and maintain the holdings increase rating.
The growth rate is under pressure at a high base. By overseas, (1) overseas growth is expected to maintain steady growth in 2024Q1. The company's overseas development trend has been good in recent years. The overseas growth rate in 2021-2023 was 34%/19%/18% respectively. In the future, through the continuous introduction of new models and the continuous strengthening of support for overseas subsidiaries, there is plenty of room for overseas development. (2) It is expected that the country will be affected by industry restructuring, and revenue will be under pressure. The domestic performance growth rate is expected to improve quarter by quarter as the base decreases, equipment renewal support, and tendering gradually eases.
Soft mirrors have entered a good stage of development. (1) The ultrasound revenue growth rate is expected to remain flat in 2024Q1. The company released the ultra-high-end ultrasound S80/P80 in 2023. It has now been introduced to the market on a small scale. It is expected to gradually expand in the future, and is expected to maintain steady growth throughout the year; (2) The revenue growth rate of soft mirror equipment is expected to be faster than ultrasound, and the company's soft mirror has entered a good stage of development, maintaining a steady rate of admission to the top three hospitals, and effectively driving the installation of grade 2 and below hospitals. The HD580 was launched in 2023, and performance such as optical imaging continues to be optimized. It is expected that the HD550 will become the leading product in the future; endoscopic ultrasound has been sold and installed in 25+ countries; the launch of several high-end speculum models is also expected to open up development space for high-end hospitals at home and abroad. (3) Hard lenses and IVUS are in the cultivation stage and are expected to be gradually released in the future.
The net interest rate is expected to gradually increase. The 2024Q1 company's sales/management/ R&D expense rates were +3.30/+1.89/+4.29pct respectively, mainly due to the scale effect caused by the high sales scale in 2023Q1. In the future, the share of soft mirrors will gradually increase, which will bring faster profit contributions, and profit margins are expected to increase steadily.
Risk warning: Product development falls short of expectations, commercialization of new products is blocked, etc.