Key points of investment:
Results for 2023 and 2024Q1 are in line with expectations. The company released its 2023 annual report. In 2023, the company achieved operating income of 34.93 billion yuan, a year-on-year increase of 15%; net profit to mother of 11.58 billion yuan, an increase of 20.6% over the previous year; net profit after deducting non-return to mother was 11.43 billion yuan, an increase of 20% over the previous year. The company plans to distribute about 1.82 billion yuan in cash dividends to all shareholders. In addition to the cash dividends already distributed in the third quarter of last year, the total dividend amount for 2023 is about 7.03 billion yuan. The company also released its 2024 quarterly report. In 2024Q1, the company achieved operating income of 9.37 billion yuan, up 12.1% year on year; net profit to mother of 3.16 billion yuan, up 22.9% year on year; net profit after deducting non-return to mother was 3.04 billion yuan, up 20.1% year on year; and net operating cash flow was 2.86 billion yuan, up 114.8% year on year. The company's 2023 and 2024Q1 results were in line with expectations.
Looking at the subregions: In 2023, the company's domestic market grew 15% (with 27% growth in the first half of the year), and the overseas market grew 16% (with a 22% increase in the second half of the year). Looking at production lines: In 2023, the company's IVD production line grew by 21% (its two-year compound growth rate of international business exceeded 30%), the life information and support production line grew by 14% (of which minimally invasive surgery grew by more than 30%), and the medical imaging production line increased by 9% (of which high-end ultrasound models increased by more than 20%). In 2023, the company achieved steady growth under the influence of complex factors such as the expansion of ICU wards and the restructuring of the domestic medical industry.
2024Q1 has a high domestic base and high international growth: According to the company's first quarterly report, the liberalization of COVID-19 in the first quarter of 2023 and the surge in demand for ICU construction led to a high domestic base, and the company's domestic business achieved single-digit growth in the first quarter of 2024. In terms of the international market, the company grew by nearly 30% in the first quarter of this year. Among them, developing countries grew by more than 30%, and the three major international business lines all achieved rapid growth.
Maintaining the “purchase” rating: Considering the short-term impact of domestic industry restructuring on tendering and procurement, we slightly lowered the company's profit forecast for 2024-2025, estimated net profit of 13.847 billion yuan, 16.624 billion yuan (previously 14.54 billion yuan and 17.032 billion yuan), and gave a profit forecast for 2026 for the first time. The estimated net profit to mother is 19.05 billion yuan. The corresponding price-earnings ratio for three years is 27 times, 22 times, and 19 times, respectively. We are optimistic about the company's innovation-driven and domestic and international trends, respectively. ” Ratings.
Risk warning: increased market competition, exchange rate fluctuations, R&D risks