Two-wheel drive for in vitro diagnosis, treatment and rehabilitation, diversified business development, and the prototype of a device platform company is beginning to take shape. The company was founded in 2008 as a pioneer in domestic treatment and rehabilitation products. It continues to cultivate various products for scenarios such as severe respiratory problems, wound treatment, and pain treatment, from photon therapy products to form medical and household solutions. The company lays out in vitro diagnosis horizontally. With products superior in electrochemiluminescence, and with specialty varieties such as glycated hemoglobin analyzers and specialty proteins, IVD has become the company's core business, and the two-wheel drive trend with treatment and rehabilitation is remarkable. The company further entered the fields of optoelectronic medicine, beauty, and endoscopy through self-research and mergers and acquisitions. The diversified business development plans were clear, and the prototype of a long-term device platform company was beginning to take shape.
Differential competition for in vitro diagnostic products can be expected, and steady revenue growth can be expected. In 2023, the company's IVD business revenue reached 829 million yuan, an increase of 10.73% over the previous year. The core business was relatively stable. The company's eCL series electrochemiluminescence products, with underlying technology comparable to leading imported brands, positioned the clinical departments and primary laboratory departments of leading medical institutions. The competitive advantage was clearly misplaced, and the installed capacity increased steadily with policy support. The technical route of the company's glycated hemoglobin products is consistent with the international mainstream, and the autonomy of core chromatography media makes the overall competitiveness of the company's products at the leading level in the world.
The matrix of treatment and rehabilitation products is rich, and optoelectronic medicine and aesthetics are leading the rapid development. In 2023, the company's treatment and rehabilitation business revenue was 304 million yuan, an increase of 33.79% over the previous year. In addition to photon therapy devices, the company continues to develop products for blood clot prevention, phlegm removal treatment, medical beauty, household medicine, etc. The product matrix is formed, and the leading products in the photonic therapy device category have an excellent reputation in leading medical institutions. The addition of optoelectronic medical and aesthetic products has guided the treatment and rehabilitation production line into a rapid growth channel. With the establishment of the non-public medical division, professional fixed teams have further expanded various downstream medical and aesthetic users. Counterpart channels have made laser treatment equipment and photonic beauty equipment targeted, laying the foundation for long-term use of subsequent consumables. Optoelectronic medical and aesthetic products are expected to continue to grow rapidly.
Profit forecast and valuation: We expect the company's net profit to be 4.28, 5.45 and 692 million yuan in 2024-2026, respectively, with growth rates of 30.40%, 27.19%, and 27.02%, respectively. The PE corresponding to the current stock price is 20, 16, and 12 times, respectively. Mindray Healthcare and New Industries were selected as IVD comparable companies, and Xiangyu Medical as comparable treatment and rehabilitation companies. The average PE of the comparable company in 2024 was 26 times. Based on the company's misplaced competitive advantage in IVD, the treatment and rehabilitation business is in a stage of rapid growth.
First coverage, giving a “buy” rating.
Risk warning: Industry competition increases risk, risk of new product promotion falling short of expectations, risk of policy changes.