Revenue grew steadily in the first quarter of 2024, and the profit side was affected by share payments. In the first quarter of 2024, the company achieved revenue of 169 million yuan (+34.91%), net profit attributable to mother of 0.3 billion yuan (-83.32%), and net profit of non-return to mother of -002 million yuan (-101.54%). Thanks to the continued expansion of AQ300, the company's revenue grew steadily in the first quarter of 2024, and the profit side declined due to share payments.
The gross margin has remained stable, and the cost ratio has increased. The gross profit margin for the first quarter of 2024 was 76.40% (+0.24pp), which remained stable. The sales expense ratio is 37.55% (+4.46pp), the management expense ratio is 16.40% (+2.88pp), the R&D expense ratio is 26.27% (+0.90pp), the financial expense ratio is -0.21% (+0.02pp), and the net interest rate is 1.63% (-11.56pp). The company continues to increase the promotion of new products, improve the marketing system, focus on investment and motivation for personnel, and the cost ratio has increased.
AQ300 promotes the release of mid-range and high-end products. The company's market penetration rate of tertiary hospitals increased further in 2023. The number of installed mainframes and lenses in level-III hospitals (including winning bids) was 96 (+269%) and 316 (+212%), respectively, and 73 (+192%) of level-III hospitals (including winning bids).
Since its launch at the end of 2022, the flagship product AQ300 has accumulated a good final reputation and is expected to enter a rapid expansion period.
Focusing on innovative research and development, the product line continues to be rich. The company continues to increase investment in R&D. In 2023, it launched new products such as UHD series duodenoscopy, various microscope products, AQ-200 Elite endoscopy systems, UHD series bifocal endoscopes, and split upper gastrointestinal endoscopes, further enriching the product line and improving department coverage. In terms of research projects, the company is actively developing 3D soft endoscopes and endoscopic robots, and future product launches are expected to further enhance market competitiveness.
Investment advice: The company's revenue for the first quarter of 2024 will grow steadily, maintaining profit forecasts. It is expected to generate revenue of 9.9/14.4/2.02 billion yuan in 2024-26, a year-on-year growth rate of 46.1%/45.8%/39.7%, and net profit to mother of 1.0/1.7/260 million yuan, with a year-on-year growth rate of 71.3%/73.2%/52.7%, corresponding to the current stock price. Optimistic that the company's high-end products will continue to drive performance, and maintain a “buy” rating.
Risk warning: Risk of marketing falling short of expectations; risk of increased competition; risk of exchange rate fluctuations.