Event: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 2,411 billion yuan, a year-on-year increase of 21.78%, net profit to mother of 486 million yuan, an increase of 47.01% year-on-year, and achieved deducted non-net profit of 463 million yuan, an increase of 54.67% over the previous year. In the first quarter of 2024, the company achieved operating income of 620 million yuan, an increase of 12.72% over the previous year, and achieved net profit of 143 million yuan, an increase of 41.36% over the previous year, after deducting non-net profit of 141 million yuan, an increase of 42.21% over the previous year
On a quarterly basis, revenue for the fourth quarter of 2023 was 666 million yuan, up 42.33% year on year, net profit to mother was 99 million yuan, down 4.03% year on year, and realized deducted non-net profit of 86 million yuan, an increase of 3.16% year on year. The company achieved a high increase in revenue in a single quarter, mainly due to the rapid recovery in demand for domestic consumables and the continued development of overseas markets. It was also related to the low base in the same period of 2024. The profit growth rate in the single quarter slowed down, mainly due to year-end company expenses, impairment, etc.; in the first quarter of 2024, the company achieved operating income of 620 million yuan, an increase of 12.72% year on year, and realized net profit of 143 million yuan, an increase of 42.21% year on year, along with downstream surgery recovery and internal internal surgery Production and operation systems continue to be optimized, and the company's performance continues to grow rapidly.
Resource integration and optimization, process cost reduction innovation, and rapid increase in profit levels. The company's sales expense ratio in 2023 was 23.74%, up 1.86 pp year on year, mainly due to the company's increased investment in sales promotion activities. The management expense ratio was 13.63%, down 1.98 pp year on year, mainly due to reduced equity incentive amortization expenses, financial expenses ratio -3.23%, down 0.16 pp year on year, which remained stable. The R&D cost rate was 6.25%, down 2.10pp year on year, mainly due to the reduction in the company's R&D trial production consumption in the current phase. At the same time, through optimization and improvements such as marketing organization adjustments, core product automation, and automation of key processes for some products, the company continued to drive an increase in profit margin. In 2023, the company's gross profit margin was 64.50%, up 3.55pp year on year, and the net profit margin was 20.51%, up 3.71 pp year on year.
Many categories of traditional endoscopic consumables are growing rapidly, and channel deepening and product innovation have achieved remarkable results. In 2023, the company's main endoscopic consumables products achieved revenue of 2,022 million yuan, up 26.36% year on year. By category, hemostasis and closure business revenue was 921 million yuan, up 27.07% year on year, expansion achieved revenue of 212 million yuan, up 13.56% year on year, ERCP achieved revenue of 173 million yuan, up 57.60% year on year, EMR/ESD revenue of 351 million yuan, up 37.94% year on year. Tumor ablation products achieved revenue of 186 million yuan. By region, the company's domestic revenue in 2023 was 1,353 billion yuan, up 18.21% year on year, and overseas business revenue was 1,042 billion yuan, up 25.8% year on year. The company continuously optimizes its marketing structure for the domestic market, segments terminal channels, and continues to expand direct sales channels and increase localization deployment in overseas markets. At the same time, the company continues to optimize and iterate existing products, which are well received by terminal hospitals and achieved good results. Along with rapid breakthroughs in overseas markets and continuous domestic cultivation, the company's various business lines are expected to continue to grow at a good rate.
The introduction of visual products is accelerating, and the second growth curve is becoming more mature. In 2023, the company's revenue from visualization products was about 97 million yuan, a year-on-year decrease of 48.78%. The slowdown in revenue growth is mainly due to short-term inventory digestion of related disposable endoscopes, and is also related to external policies. We expect to gradually resume normal delivery and procurement of disposable internal medicine cholangioscopes in 2024.
At the same time, the company continues to accelerate the clinical promotion of disposable surgical cholangioscopy and bronchoscopy. At present, it has basically completed the trial of extending the disposable endoscopy direct visualization technology platform to multiple departments and fields, and is expected to accelerate growth in the future.
Profit forecast and valuation: Based on financial data, we adjusted the profit forecast. It is estimated that the company's endoscopic products are expected to recover at an accelerated rate, and the increase in the level of superposition automation is expected to drive rapid profit growth. At the same time, policy changes may cause short-term uncertainty. 2023-2025 operating income of 29.39, 36.03, 4.450 billion yuan (+22%, 23%), adjusted to 30.89 billion yuan and 39.94 billion yuan (+23%) for the previous 24-25 years; estimated net profit to mother of 5.96, 7.43, 918 million yuan (+23%, 25%, 24%), before adjustment of 635 to 822 million yuan in 24-25 years. The company's current stock price corresponds to 23, 18, and 15 times PE in 2024-2026. Considering the low localization rate in the minimally invasive diagnostic and treatment device industry, the launch of new products such as disposable cholangioscopy is expected to accelerate performance and maintain a “buy” rating.
Risk warning events: risk of changes in industry policies, increased risk of market competition, risk that public data used in research reports may be delayed or not updated in a timely manner.