Incidents:
On April 26, 2024, the company released its 2024 quarterly report: Q1 achieved revenue of 494 million yuan, a year-on-year increase of 10.09%; net profit to mother of 166.204 million yuan, loss of 63.5347 million yuan in the same period of the previous year; net profit without deduction of 8.6877 million yuan, and loss of 74.281 million yuan for the same period last year.
Investment highlights:
2024Q1 gross margin increased year on year, and profitability is expected to continue to recover in 2024Q1. The company's gross sales margin was 33.71%, up 1.28 pct year on year; sales expenses ratio, management expense ratio, and R&D expense ratio were 15.06%, 8.65%, and 14.18%, respectively, compared to -11.49pct, -2.89pct, and -6.88pct, respectively. The cost rate decreased significantly, or related to the company's focus on business development direction, active layout and selection, and continuous optimization of organizational mechanisms and talent structure. By the end of 2023, the company The total number of employees was 6258, a year-on-year decrease of 644.
We believe that the company continues to cultivate, strengthen core products, and promote business transformation. In the future, as demand for the company's next-generation WineX products continues to increase and losses in innovative businesses are reduced, the company's profitability is expected to recover further in the future.
WineX projects are being scaled up, and Internet+ medical business operations are deepening the “1+X” strategy. In 2023, the company's medical and health informatization and Internet healthcare business revenue were 2,849 million yuan and 312 million yuan respectively, +12.66% and -44.53%, respectively. By business:
(1) Healthcare informatization: ① WineX: We have expanded hundreds of WineX customers across the country. Examples include Peking University People's Hospital, Army Military Medical University First Affiliated Hospital, Zhejiang Traditional Chinese Medicine Hospital, and private medical institutions such as Taikang's medical centers and Midea's Heyou International Hospital. ② Smart hospitals and hospital platforms, medical communities/medical consortia, primary health, etc.: More than 60 million-level projects have been added, such as the construction of smart hospitals such as Chongqing Maternal and Child Health Hospital and Datong Fifth People's Hospital, the construction of integrated platforms and clinical data centers for the Army Military Medical University's 4 hospitals in Chongqing, and the construction of medical communities in counties such as Luanchuan County in Henan and Heqing County in Yunnan. ③ Smart Hospital Rating: Added to help 4 hospitals successfully pass the electronic medical record application level 5 rating.
(2) Internet+Healthcare: In 2023, Nari Co., Ltd., Huanyao Weining, and Weining Technology's revenue was 155 million yuan, 212 million yuan, and 202 million yuan respectively, +1.5%, -53.6%, and +26.8%, respectively; net profit was -23 million yuan, -59 million yuan, and -114 million yuan respectively. The same period last year was -37 million yuan, -166 million yuan, and -151 million yuan, respectively. The innovative business drastically reduced losses in 2023.
① Nari Health: The number of medical institutions providing Internet medical application services surpassed 10,000 (2022:8,500 +), reaching a maximum of 863 million daily HTTP visits (2022:440 million), and the number of monthly active users exceeded 24 million (2022:20 million +). ② Huanyao Wei Ning: While stabilizing the core business structure, carry out business adjustments and personnel optimization, vigorously promote the Internet outpatient insurance business and direct payment claims business, and continuously improve operational service capabilities. ③ Weining Technology: Completed a new round of financing of 300 million yuan, including an increase of 225 million yuan. In 2023, Weining Technology signed a contract of about 268 million yuan, an increase of about 122% over the previous year.
Actively promote “big model+medical” application exploration, and the WinGPT application launch company actively promotes “big model+medical” application exploration. In October 2023, the company officially released WingPT, a major model in the medical vertical field, and built into the company's full range of products in the form of WineX Copilot, an intelligent medical assistant. WineX Copilot has integrated more than 100 clinical application scenarios covering hospital management, doctor efficiency, and patient side to improve healthcare work efficiency and medical quality. In 2023, intelligent applications such as WineX Copilot medical record clerical assistant and imaging report assistant have been implemented in leading hospitals in Beijing, Shanghai and other places.
Profit forecast and investment rating: The company is a leading domestic medical informatization company, deepening and advancing the “1+X” strategy. The WineX product matrix continues to be rich, and the Internet+ medical innovation business trend is improving.
We expect the company's revenue for 2024-2026 to be 38.01/45.90/5.576 billion yuan, respectively, and net profit to mother of 5.60/75/ 1,024 million yuan, respectively. The PE corresponding to the current stock price is 27/20/15X, respectively, maintaining a “buy” rating.
Risk warning: Macroeconomics affects downstream demand, increased market competition, development or promotion of new products such as WineX falls short of expectations, and increased losses in the Internet+ medical innovation business.