Incident: The company released its annual report for the year 20223 and the quarterly report for 2024. In 2023, the company's revenue was 480 million yuan (+25.2%), and net profit to mother was 100 million yuan (+48.8%). In 2024Q1, the company's revenue was 0.7 billion yuan (+2.1%), and net profit to mother was 0.1 billion yuan (-21.6%). The results were in line with expectations.
The performance was in line with expectations, and the growth rate of blood purification products and new products was impressive. By product type, safe infusion revenue in 2023 was 334 million yuan (+5.5%), with stable market order demand; blood purification revenue of 80 million yuan (+76.7%), mainly due to increased order demand for equipment such as hollow fiber membrane spinning lines and automatic dialyzer assembly machines; other revenue of 70 million yuan (+60.3%), mainly from sales contributions of new products (such as pre-filling equipment).
Profitability increased significantly, and the four-rate rate remained healthy. In terms of profitability, the company's gross margin in 2023 was 59.3% (+14.5pp), thanks to effective control of order costs. Looking at the cost ratio, the company's sales/management/R&D/finance expenses rate in 2023 was 6.7%/18.8%/6.9%/-1.6%, respectively, with a year-on-year change of +2.0pp/-0.9pp/ -2.7pp/+1.3pp. Among them, the increase in sales expenses is mainly due to increased marketing bonuses and expenses such as exhibitions and business hospitality required for business development. R&D expenses in 2023 were 33.18 million yuan (-9.5%). Some R&D projects formed sales and were transferred out of R&D expenses.
Approval of contact lenses is imminent, leading to a second revenue growth curve. The company is a solution provider in the field of intelligent equipment. It has a customized equipment production model according to customer order plans, and has unique advantages in intelligent equipment manufacturing. Contact lenses are a forward-looking layout for the company's downward expansion and new business expansion. It is expected that product registration approval will be obtained in 2024. The company is building 6 production lines, and the annual yield is expected to reach 18 million pieces/strip, which is expected to bring the company a second revenue growth production curve.
Profit forecast: Revenue for 2024-2026 is expected to be 6/8/1.1 billion yuan, up 32%/33%/32%; net profit to mother will be 1.1/1.3/150 million yuan, up 8%/16%/19%, corresponding PE 26/22/19 times.
Risk warning: Market competition increases risk, risk of insufficient order confirmation, contact lens business approval and production line construction falling short of expectations.