Description of the event

The company released its 2024 quarterly report. 2024Q1 achieved operating income of 169 million yuan, a year-on-year increase of 34.91%; realized net profit of 2.7595 million yuan, a year-on-year decrease of 83.32%; realized net profit deducted from non-mother of 245,600 yuan, a year-on-year decrease of 101.54%; and achieved basic earnings per share of 0.02 yuan, a year-on-year decrease of 83.33%.

Incident reviews

Affected by the high base, the year-on-year growth rate of 2024Q1's revenue slowed compared to the same period last year, but revenue continued to grow at a relatively rapid pace. 2023Q1 achieved revenue of 125 million yuan, an increase of 53.77% year on year, mainly because the company strengthened marketing and increased sales revenue for new products such as AQ-300 products; 2024Q1 achieved revenue of 169 million yuan, an increase of 34.91% year on year, mainly due to the steady growth of AQ-300 products.

The net profit of the 2024Q1 company declined significantly, mainly due to an increase in share payment expenses, which increased the cost ratio during the sales period. 2024Q1's sales period expense ratio was 80.01%, up 8.26 percentage points from the same period last year. When broken down, the sales expense ratio, management expense ratio, financial expense ratio, and R&D expense ratio were 37.55%, 16.40%, -0.21%, and 26.27%, respectively, with changes of 4.46, 2.89, 0.02, and 0.9 percentage points from the same period last year. Equity incentives had a significant impact on net profit in 2024Q1. Excluding the impact on share payments, net profit attributable to shareholders of listed companies was 24.5567 million yuan, an increase of 24.15% over the same period last year (after excluding share payments).

Investment advice

The company is expected to achieve revenue of 10.06, 14.33, and 2,031 billion yuan respectively in 2024-2026, with year-on-year increases of 48.3%, 42.5%, and 41.7%; achieving net profit of 1.16, 1.83, and 270 million yuan, respectively, with year-on-year increases of 99.7%, 58.6%, and 47.2%; corresponding EPS is 0.86, 1.37, and 2.01 yuan respectively, calculated at a closing price of 53.41 yuan on April 30. The corresponding PE is 61.9X, 39.1X, and 26.5X, respectively, to maintain “growth-” “B” rating.

Risk warning

There is a risk that there is a big gap between internationally renowned companies in terms of market share and product abundance; the risk of relatively insufficient production capacity; the risk of changes in industry policies and product certification; the risk of technological innovation and R&D failure; and the risk of Olympus developing localized R&D and production in China.