The company published its quarterly report for '24. 24Q1 achieved revenue of 306 million yuan/yoy +10.06%, net profit attributable to mother of 107 million yuan/yoy +21.69%, after deducting net profit of 103 million yuan/yoy +24.60%.
Specifically, domestic market revenue was 229 million yuan/yoy +3.67%, accounting for 75%; international market revenue was 77 million yuan/yoy +34.73%, accounting for 25%. Its internal in vitro diagnosis business revenue in China is 170 million yuan/yoy +28%, and international in vitro diagnosis business revenue is 72 million yuan/yoy +53%. According to estimates, the domestic treatment and rehabilitation business revenue is about 59 million yuan/yoy -33%. Considering the increase in the company's overall gross margin & net margin, we expect the decline in this business to be due to a sharp decline in clinical medical products rather than the impact of the dermatology and aesthetic business. Overall, at present, the competitiveness of the company's in vitro diagnostic products in domestic and international markets continues to improve, clinical applications of luminescence and saccharification products continue to increase, and medical and aesthetic products are developing at an accelerated pace, driving the company's performance growth.
The 24Q1 company's comprehensive gross profit margin was 69.99% /yoy+4.18pct; the period expense ratio was 26.62% /yoy-2.66pct, of which the sales/management/R&D/finance expense ratios were 12.80%/4.96%/11.97%/-3.11%, respectively, -0.69/+0.12/+0.20/-2.29pct; overall, net profit margin was 35.07% /yoy+3.35pct.
In the future, the share of high-value-added businesses such as medicine and aesthetics is expected to continue to increase: 1) The promotion of the ace product cold lift is accelerating; 2) the sales volume of ultrasound V in Latin America is at the top; 3) Strong pulsed light therapy devices (MM light) were launched at the end of November 2023, and some regions have already signed contracts with agents. Judging from the market situation, the market feedback is good; 4) The core components of the Q-switched laser therapy device have successfully achieved independent research and production; 5) Upgraded red and blue light therapy devices are already finished. The company combined “cold lift+ultrasound V Latin American+MM light” into the “Three Great Anti-Aging” positions are natural repair and anti-aging, ultrasonic anti-aging, and full-body whitening. Therefore, they initially prefer to expand new products to old customers quickly. It is expected that the dermatology and aesthetic business will maintain a high growth rate of more than 50% this year.
Profit forecast and investment advice: We expect net profit to be 4.3/5.3/640 million yuan respectively in 24-26, corresponding to the current market capitalization of 20/16/13 times PE, respectively. The company focuses on the two major sectors of in vitro diagnosis and treatment and rehabilitation. The medical and aesthetic business is developing at an accelerated pace, and the overall performance is maintaining a high growth trend and maintaining a “buy” rating.
Risk warning: Industry competition intensifies, R&D progress falls short of expectations, sales promotion falls short of expectations, etc.