The 23-year results are under pressure, mainly due to the negative impact of external supervision on the hospital recruitment business. The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 70 million yuan, a year-on-year decrease of 3.0%; net profit to mother was 42.5 million yuan, a year-on-year decrease of 37.5%. The company's new orders declined slightly year over year, and revenue declined slightly throughout the year. The decrease in revenue, combined with the increase in management expenses and sales expenses, caused net profit to return to mother in 2023 to fall compared to the same period last year.
At present, external regulatory pressure has basically been lifted, and the 24Q1 performance verifies expectations for recovery. The company achieved revenue of 120 million yuan in a single quarter in 24Q1, a year-on-year increase of 14.0%, net profit loss of 11.85 million yuan, a year-on-year reduction of 47.7%, loss of 22.66 million yuan in the same period last year, and a comprehensive gross profit margin of 47.2%, an increase of 2.2 percentage points over the same period last year, mainly due to increased product maturity. In terms of expenses, management expenses decreased by 9.32% year over year, and R&D expenses decreased by 28.2% year over year.
Electronic medical records and data center products are constantly being upgraded, and specialist electronic medical records have made outstanding progress. By the end of 2023, the company had helped 31 medical institutions pass electronic medical records level 5 or above certification, and is in a leading position in the industry. In the field of specialist electronic medical records, the company upgraded its emergency first aid platform in 2023, achieving revenue of 18.3802 million yuan, a threefold increase over the previous year. By the end of 2023, the company had helped more than 60 medical institutions pass high-level connectivity assessments.
Actively explore the AI+ medical field and strategically invest in Ander Medical Intelligence. In 2023, the company successfully developed and trained the Jiahe Medical Model. Currently, it supports nearly 20 medical tasks and intelligentizes the entire diagnosis and treatment process. In April 2024, the company took a stake in Ande Medical Intelligence and became the largest shareholder, with a shareholding ratio of 22.45%. Currently, the company has cooperated with Ande Medical Intelligence on the first aid platform product line.
Profit forecasting and investment advice. The company's net profit due to mother in 2024-2026 is expected to be 0.8/1.3/170 million yuan, respectively, and the corresponding EPS is 0.57/0.93/1.24 yuan per share, respectively. Referring to comparable company valuations, the company was given a reasonable valuation ratio of 45 times PE in 2024, with a reasonable value of 25.44 yuan/share to maintain a “buy” rating.
Risk warning. Industry demand recovery falls short of expectations; implementation of relevant policies falls short of expectations; application of new technologies such as AI falls short of expectations; industry competition intensifies