Incidents:
The company released its report for the first quarter of 2024, achieving operating income of 1,021 million yuan (YoY +16.62%), net profit attributable to mother of 426 million yuan (YoY +20.04%), and net profit of 399 million yuan (YoY +25.49%).
Comment:
1. The company's overall performance was in line with expectations, and the increase in reagent revenue led to an increase in gross margin. 2024Q1 achieved revenue of 1,021 billion yuan, up 16.62% year on year. The overall performance was in line with expectations. Among them, reagent revenue increased 26.42% year on year and instrument revenue decreased 3.86% year on year. Driven by high-margin reagent products, the company's overall gross margin reached 73.84%, up 5.16 pct year on year. Furthermore, the sales expense ratio was 15.61% (+1.31pct), the management expense ratio was 2.87% (+0.49pct), the R&D expense ratio was 9.93% (+0.43pct), and the financial expense ratio was -0.29% (-0.65pct, mainly affected by changes in exchange profit and loss), and the cost rate level remained relatively stable.
2. Domestic business growth slowed due to industry policy disturbances, and overseas high-speed machine installation+product structure optimization drove steady growth in performance. 2024Q1, the company's domestic business increased 12.17% year on year, and overseas business increased 24.95% year on year. The fully automatic chemiluminescence instrument MAGLUMI X8 sold and installed a total of 220 units. The growth rate of the domestic market is slowing, on the one hand, because the medical industry is still being overhauled. Furthermore, under the implementation of DRG, routine testing packages such as eight pre-operative tests have begun to be split off, slowing down the release of test reagent products. Subsequently, with the beginning of the implementation of the Anhui Provincial Alliance procurement process, all companies selected Group A, and the expected procurement volume is impressive, and the domestic business growth rate is expected to pick up. In overseas markets, the company continues to promote overseas installations of X6 and X8 medium- and high-speed machines. As the share of high-end models increases and the reagent business grows, the overseas business is expected to maintain a high growth rate and steady volume.
Profit forecast: We expect the company's 2024-2026 revenue to be 49.68 billion yuan, 62.08 billion yuan, and 7.725 billion yuan, respectively, with year-on-year growth rates of 26.42%, 24.97% and 24.44%, respectively, and net profit to mother of 20.65, 26.35, and 3.369 billion yuan, respectively. The year-on-year growth rates are 24.90%, 27.57%, and 27.88%, corresponding to the current stock price PE, respectively, maintaining the “recommended” rating.
Risk warning: Mining implementation falls short of expectations, R&D progress falls short of expectations, new product sales fall short of expectations, increased market competition, risk of industry policy adjustments, fall short of expectations in overseas market expansion, risk of changes in the international situation, etc.