Incidents:
The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 34.932 billion yuan, an increase of 15.04% year on year; net profit to mother was 11.582 billion yuan, up 20.56% year on year; net profit after deducting non-return to mother was 11.434 billion yuan, up 20.04% year on year. In the first quarter of 2024, the company achieved revenue of 9.373 billion yuan, up 12.06% year on year; net profit to mother was 3.160 billion yuan, up 22.90% year on year; net profit without return to mother was 3,037 billion yuan, up 20.08% year on year.
Domestic and foreign two-wheel drive, three major production lines achieve steady growth
In 2023, the company's revenue was 34.932 billion yuan (yoy +15.04%), of which domestic revenue was 21.382 billion yuan (yoy +14.54%) and overseas revenue was 13.550 billion yuan (yoy +15.83%). By business line, life information and support business revenue was 15.252 billion yuan (yoy +13.81%). The new medical infrastructure contributed to the company's business. The in vitro diagnosis business revenue was 12.421 billion yuan (yoy +21.12%), and the restoration of routine diagnosis and treatment volume contributed to steady growth. The medical imaging business has revenue of 7.034 billion yuan (yoy +8.82%). In the future, as the ultra-high-end ultrasound platform Resona A20 continues to grow, it is expected to accelerate the increase in the localization rate of ultrasound.
Profitability continues to improve, and new products are introduced
The company's gross margin in 2023 was 66.16% (+2.01pp), mainly due to an increase of 3.95 and 2.70 percentage points in the in-vitro diagnosis and medical imaging business, respectively. Net margin was 33.15% (+1.50pp).
At the same time, the company continued to increase its R&D efforts. The R&D investment in 2023 was 3.78 billion yuan (yoy +18.43%), accounting for 10.82% of total revenue. It continued to enrich the innovative product matrix, launch the 4K 3D electronic thoracic and abdominal endoscopy system UX5 series, the MT 8000 all-laboratory intelligent assembly line, and the ultra-high-end desktop Resona A20. The intelligent medical ecosystem “Sanrui” solution provides overall hospital-level digital intelligent solutions, and continues to be recognized by hospital customers.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 42.05 billion yuan, 50,422 billion yuan and 60.512 billion yuan respectively, with year-on-year growth rates of 20.25%, 20.04% and 20.01% respectively, and net profit to mother of 13.951 billion yuan, 16.775 billion yuan and 20.061 billion yuan respectively, with year-on-year growth rates of 20.45%, 20.25% and 20.18%, respectively, and 3-year CAGR of 20.29%. In view of the rapid development of the company's domestic and foreign markets, new products continue to be launched. Referring to comparable company valuations, we gave the company 35 times PE in 2024, with a target price of 403 yuan, maintaining a “buy” rating.
Risk warning: marketing falls short of expectations, geopolitical risks, new product development falls short of expectations