Incident: The company's total revenue in 2023 was 1,187 million yuan (+32.43%), net profit to mother of 492 million yuan (+37.98%), after deducting non-net profit of 462 million yuan (+42.74%). In the fourth quarter of 2023, the company's total revenue was 299 million yuan (+28.63%), net profit attributable to mother was 104 million yuan (+85.74%), after deducting non-net profit of 97 million yuan, an increase of 100.91% over the previous year. In the first quarter of 2024, the company's revenue was 358 million yuan (+25.38%), net profit attributable to mother was 184 million yuan (+47.62%), after deducting non-net profit of 178 million yuan (+48.91%). In the first quarter of '24, the sales expense ratio was 7.42% (-1.36pct), the management expense ratio was 3.52% (-1.10pct), and the R&D expense ratio was 6.48% (-6.21pct). The company optimized the R&D team structure, assessed and optimized the commercialization potential of the project, and the R&D input-output ratio increased.
Star products continue to grow steadily, and new products are being promoted at an accelerated pace. In 2023, the company's aortic stent revenue was 940 million yuan, up 28.07% year on year, intraoperative stent revenue was 132 million yuan, up 54.59% year on year, and peripheral and other revenue was 115 million yuan, up 49.30% year on year. The company's innovative products, Castor branched aortic stents, Minos abdominal aortic stents, and Reewarm PTX drug balloons, continued to gain strength. The number of patients admitted to the new Talos thoracic aortic stent and Fontus intraoperative stent systems and the number of terminal implants increased rapidly, leading to a steady increase in the company's sales revenue and profits, further improving the company's competitiveness in the aortic and peripheral vascular intervention market.
Strengthen the channel layout in the sinking market, and further increase market coverage. The company continues to focus on marketing channel layout for second-tier, third-tier, and fourth-tier cities and some populous counties to increase market decline. By the end of the first quarter of '24, the company's Castor branch aortic stents and delivery systems had covered more than 1,000 terminal hospitals, Minos abdominal aortic stents and delivery systems had covered more than 850 terminal hospitals, and Reewarmptx drug balloon dilatation catheters had covered more than 950 terminal hospitals; new products accelerated admission and promotion, and the Fontus branch intraoperative stent system had entered more than 200 hospitals.
Globalization has accelerated, and overseas sales have increased by more than 55% in '23. In 2023, the company's overseas sales revenue increased by more than 55% compared to the same period last year. By the end of 2023, the company has now sold in 31 countries and expanded its business to other countries and regions in Europe, Latin America and Asia Pacific; among them, Castor branch laminating stents and delivery systems have entered 16 countries, Minos abdominal aortic stents and delivery systems have entered 19 countries; Hercules Low Profile straight tube laminating stents and delivery systems have entered 21 countries; and the Reewarm PTX pharmaceutical balloon expansion catheter was first implanted in Brazil.
Profit forecast. We expect the company's 24-26 EPS to be 5.31, 6.83, and 8.71 yuan, respectively, and net profit of 6.54 billion yuan, 8.42, and 1,074 million yuan respectively. Referring to comparable company valuations and considering the company's high momentum and leading position in the aortic and peripheral intervention industry, we will give the company 30-35 times PE in 2024, corresponding to a reasonable value range of 159.19-185.72 yuan, and give it a “superior to the market” rating.
Risk warning: policy risks such as aortic interventional device collection; risk of market competition; risk of R&D progress falling short of expectations; risk that the amount of surgery falls short of expectations.