Key points of investment:
Domestic digital X-ray detector faucet
Yirui Technology is a leading domestic digital X-ray detector. After more than 10 years of hard work, it has become one of the few companies in the world that also master the four sensor technologies of amorphous silicon, IGZO, CMOS, and flexible substrates. It focuses on the middle of the X-ray detector industry chain and expands its own production capacity upstream. The company's business covers medical, industrial, security and other fields. It has established long-term stable cooperation with well-known X-ray equipment manufacturers at home and abroad, and continues to build global popularity. As of 2021, the company's global digital X-ray detector market share was 16.90%.
Demand in the digital X-ray detector industry continues to grow
Digital X-ray detectors can detect X-rays remaining after penetrating the human body or object, and complete image output through conversion. The technical barriers are high and the adhesion to downstream equipment users is strong. Yole data predicts that the global X-ray detector market will reach 2.78 billion US dollars in 2024, with a compound growth rate of 5.9% in 2018-2024. Medical-related applications account for the highest proportion, and are expected to exceed 69% in 2024, followed by security and industry, respectively. As clinical segments of medical imaging equipment continue to be rich, energy battery production expands, and testing requirements for high-end manufacturing increase, demand in the X-ray detector market continues to grow.
Technology deposit+customer stickiness to build a company moat
The company lays out in the middle of the industrial chain, penetrates upstream, masters core technologies such as scintillators, detector chips, and TFT modules, and has leading global competitiveness in CMOS and amorphous silicon technology routes. Through IPOs and convertible bond raising, the company expects the production capacity of flat panel detectors to reach 94,000 units when all fund-raising projects are put into operation in the future, gradually achieving scale advantages to control costs and further expanding the comprehensive capabilities of global core suppliers. Hard power such as technology and production capacity, combined with the soft power of leading customers, enables the company to continue to expand new customers in the medical, industrial and other fields, and generate long-term stable orders.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2024-2026 to be 23.67/29.79/36.96 billion yuan, respectively, with year-on-year growth rates of 26.99%/25.86%/24.08%, and net profit to mother of 8.28/10.83/1,391 billion yuan respectively, year-on-year growth rates of 36.37%/30.72%/28.41%, 3-year CAGR of 31.79%, corresponding PE 26/20/16 times, respectively. The absolute valuation method measures the company's value per share of 289.72 yuan, which is 35 times the company's average PE in 2024. Given that the company is a leading domestic X-ray detector, customer cooperation is gradually deepening, and comprehensive absolute valuation method and relative valuation method, we gave the company 35 times PE in 2024, with a target price of 284.27 yuan for the first time, covering the first time and giving it a “buy” rating.
Risk warning: Risk of customer orders falling short of expectations, risk of geopolitical and trade conflicts, risk of new product promotion falling short of expectations.