The revenue side of 1Q24 achieved rapid growth, maintaining that the “buy” rating company 1Q24 achieved revenue of 169 million yuan (yoy +34.9%) and net profit of 2.76 million yuan (yoy -83.3%), and the company achieved rapid growth on the revenue side. We maintain our profit forecast. We expect EPS of 0.66/1.56/2.51 yuan for 24-26. The company is a leader in the domestic soft mirror circuit, with excellent product performance and steady commercial promotion. We use the DCF valuation method (assuming a WACC of 9.2% and a sustainable growth rate of 2.8%) to keep the target price unchanged at 80.07 yuan and maintain “buying”.
The gross margin level has been rising steadily. Continued to strengthen product sales and R&D investment, the company's 1Q24 gross margin was 76.4% (yoy+0.2pct), driving a steady increase in the overall gross margin against the backdrop of the company's continued release of new high-end products. The company's 1Q24 sales/management/R&D expense rates were 37.6%/16.4%/26.3% (yoy+4.5/+2.9/+0.9pct), respectively. The company continues to increase investment in product promotion and R&D, continuously enhance its brand influence and expand its product matrix.
Optimistic about the upward trend of business in all sectors over the past 24 years
1) Endoscopic equipment: We estimate that the revenue in the 1Q24 sector grew rapidly year on year, and the company's various types of endoscopic equipment market positioning are clear and recognition is constantly increasing. Considering the continued drive of favorable policies such as domestic medical equipment updates and new medical infrastructure, and superimposed on the company's continued expansion of high-end products such as the AQ-300, I am optimistic that the sector's revenue will continue to grow rapidly in 24 years; 2) Endoscopic diagnosis and treatment consumables: considering the diverse and continuous expansion of the company's consumables products, I am optimistic that 24 years will lead to steady growth as industry demand recovers and product promotion is strengthened; 3) Endoscope maintenance: I am optimistic that 24 years will continue to improve as the company's installed capacity increases.
Product development is progressing smoothly and continues to strengthen the voice of the industry
The company's new product research and development work is progressing steadily, including: 1) AQ-300 system and supporting lenses: The company continued to improve the supporting lens layout in 23 years, and lenses such as 100x magnification endoscopes, duodenoscopes, bronchial endoscopes, nasopharyngeal endoscopy, and bifocal endoscopes have all been approved to continue to enhance the competitiveness of AQ-300 system products; 2) 3D digestive endoscopy: the design and development verification of the 3D soft endoscopy algorithm has now been completed; 3) Endoscopy robots have now been completed Machine testing and animal testing After the product is launched, it will further enhance the company's market voice in complex and precise gastrointestinal endoscopic surgical equipment.
Risk warning: sales of core products fell short of expectations, market competition intensified, and core technical personnel were lost.