Introduction to this report:
Steady growth under a high base, 24Q1 performance is in line with expectations. The company continues to deepen management changes and multi-market multi-business platform-based layout, and the performance is expected to continue to grow steadily. Maintain an increase in holdings rating.
Key points of investment:
Maintain an increase in holdings rating. Maintain the 2024-2026 EPS forecast of 0.99/1.29/1.68 yuan, and maintain the target price of 22.77 yuan, corresponding to 2024 PE 23X, and maintain the holdings increase rating.
Performance was in line with expectations, and profitability improved. The company achieved revenue of 306 million yuan (+10.06%) in Q1 of 2024, net profit of 107 million yuan (+21.69%), after deducting non-net profit of 103 million yuan (+24.60%). It still achieved steady growth under a high base, and the performance was in line with expectations. The product structure was optimized, and the comprehensive gross margin increased to 69.99% (+4.00pct), the cost ratio decreased by 26.621% (-2.66pct) during the period, and the net interest rate to mother was 35.07% (+3.35pct), further improving profitability.
The international market achieved rapid growth. Domestic market revenue in Q1 2024 was 229 million (+3.67%), accounting for 75%. Despite the high base of some treatment and rehabilitation equipment and myocardial inflammation detection reagents, it achieved steady growth. International market revenue was $77 million (+34.73%), accounting for 25%. The company focuses on developing localized sales, clinical applications, service teams and supply chain systems in various countries. With the promotion of product registration and improvement of business layout, the international business is expected to maintain steady growth in the future.
The in vitro diagnostic production line resumed rapid growth, and skin medicine and aesthetics continued to gain strength. IVD production line revenue in Q1 2024 was 242 million yuan (+35%), its domestic IVD production line revenue was 170 million yuan (+28%), and international IVD production line revenue was 72 million yuan (+53%). High-speed machines and assembly lines for the chemiluminescence business are expected to gradually gain strength and increase market share. The saccharification business is expected to continue to grow rapidly with the launch of high-end models and the acceleration of import substitution. The dermatology and aesthetic layout is progressing smoothly, and the “Three Masters of Anti-Aging” (that is, “cold lifting+ultrasound V Latin America+MM light”) are expected to continue to drive high production line growth. Furthermore, incubating the consumer health business and launching new products such as photonic masks, energy pumps, and hair growth caps is expected to become a new growth point.
Risk warning: New product launches and promotions fall short of expectations; risk of price reduction in product collection