Event: The company released its annual report for 2023 and the first quarter report for 2024. The company achieved operating income of 462 million yuan (+43.72%); net profit attributable to mother of 136 million yuan (+45.22%); and net profit after deduction of non-return to mother of 122 million yuan (+58.93%). In the first quarter of 2024, it achieved operating income of 87.673 million yuan (-8.24%); net profit attributable to mother of 21.7532 million yuan (-27.69%); net profit after deducting non-return to mother 19.2109 million yuan (-27.42%). The company plans to transfer 4 shares for every 10 shares and distribute a cash dividend of 15.032 yuan to all shareholders. The cash dividend amount will reach 102 million yuan, accounting for 75% of the net profit to mother for the year.
[Persevere in BL R&D _ develop a new A-drive for SUCHUANG MM] and continue to enrich the product pipeline. In 2023, the company continued to increase R&D investment in key projects. During this period, R&D investment reached 784.325 million yuan (+27.86%), accounting for 16.97% of revenue; the number of R&D personnel reached 187, accounting for 26.71% of the total number of people in the company. 36 new patents were applied for, including 16 invention patents; 47 new authorized patents were added.
R&D results have been transformed with high quality, traditional advantage projects have been iteratively updated, and R&D of emerging pipelines is active.
In 2023, the company continued to accelerate research and development of advanced technology for traditional advantage projects. A new generation of products such as pelvic floor functional magnets, transcranial magnetism, and group biofeedback devices were iteratively upgraded and launched. The business scale and market share of core products represented by magnetic stimulation grew rapidly. Among them, the operating revenue of magnetic stimulation products increased by 46.59% over the previous year. The company's emerging products have all made expected progress. They have obtained Class II medical registration certificates for high-frequency electrocautery devices and Class III medical registration certificates for semiconductor lasers. Plastic magnetic products have obtained FDA certification and domestic medical device registration certificates, and have formed a relatively comprehensive rehabilitation robot product matrix. In the future, they will further reduce costs and increase efficiency, and continuously improve market competitiveness and commercialization levels.
Continue to focus on the main rehabilitation business and focus on cultivating emerging businesses such as urination, medicine, and aesthetics. In 2023, the company built a leading rehabilitation device product matrix covering pelvic floor and postpartum rehabilitation, neurological rehabilitation, mental rehabilitation, and sports rehabilitation by creating a full scenario of “magnetic+electrical+electrophysiology+robot” rehabilitation devices. At the same time, the company took the acquisition of Coreda Laser as an opportunity to actively build a medical, aesthetic and urological business with energy source equipment as the core product matrix to help replace domestic imports.
Profit forecast: Considering that the company's R&D innovation helps business upgrade and transformation, the company's ability to generate subsequent revenue is expected to be 579/7.06/825 million yuan respectively in 2024-2026, net profit to mother is 1.73/2.19/268 million yuan, and EPS is 2.52/3.20/3.90 yuan respectively; the corresponding PE is 18.48/14.58/11.95 times, respectively, giving a “gain” rating.
Risk warning: R&D transformation and marketing risks, medical policy risks, increased product competition.