Incident: In 2023, the company achieved operating income of 329 million yuan, an increase of 26.46% over the previous year; realized net profit of 5.8885 million yuan to mother, an increase of 85.17% over the previous year. In the fourth quarter of 2023, the company achieved revenue of 93 million yuan, an increase of 36.11% over the previous year. In the first quarter of 2024, the company achieved operating income of 89 million yuan, a year-on-year increase of 71.01%, and net profit of 4.1692 million yuan to mother.
The volume of three-dimensional surgeries continued to grow at a high rate, and the growth rate of catheterization products exceeded 32%. In 2023, the company's revenue from catheter products was 219 million yuan, up 32.03% year on year, equipment revenue was 0.17 million yuan, down 60.00% year on year, and revenue from other products was 84 million yuan, up +68.87% year on year. Since its launch, TrueForce pressure catheters have completed more than 1,000 radiofrequency ablation surgeries under pressure monitoring guidance in many centers. IceMagic balloon cryoablation catheters and IceMagic cryoablation equipment have been connected to networks in more than 20 provinces, and trials have been carried out at various centers. By the end of 2023, the company's products had covered more than 1,000 hospitals in 31 provinces, autonomous regions and municipalities across the country, and the total number of 3D surgeries had exceeded 50,000.
Domestic volume procurement has been implemented one after another, and domestic replacement of electrophysiology has been accelerated. In 2023, the fujian-led inter-provincial alliance electrophysiological volume procurement process has completed implementation of volume procurement in 27 provinces; in the DRG payment and electrophysiological bandwidth procurement by medical institutions in Beijing, the company won the bid for all products such as TrueForce pressure catheters and EasyStars star standard test catheters, which were implemented on December 15, 2023, and the refrigeration series products have applied for additions; the Beijing-Tianjin-Hebei “3+N” alliance is in the joint procurement of electrophysiological medical consumables. The company has 4 sets and orders for electrophysiological medical consumables, including the freeze-ablation series products. All parts won the bid.
Domestic and overseas markets are expanding at an accelerated pace, accounting for more than 20% of overseas revenue. The company is firm in its global development strategy. According to the company's product positioning, the company focuses on strengthening the establishment of agency channels and increasing overseas clinical usage. As TrueForce pressure catheters obtained EU MDR certification and UK UKCA certification in August 2023, the expansion of the atrial fibrillation market at home and abroad began to advance collaboratively, and the first batch of clinical applications were successfully carried out in Spain, Greece, Poland and other countries. By the end of 2023, the company's international market had achieved a year-on-year increase in revenue of more than 50%, accounting for more than 20% of overseas revenue, covering a total of 35 countries and regions. A total of 21 products obtained CE certification, 4 products obtained US FDA registration permits, 1 product obtained UKCA certification, and 20 products obtained Brazilian registration certificates.
Profit forecast. We expect the company's 24-26 EPS to be 0.09, 0.16, and 0.24 yuan respectively, with net profit growth rates of 631.9%, 86.4%, and 48.3% respectively. Referring to comparable company valuations and considering the company's high mood and leading position in the electrophysiology industry, we will give the company 30-35 times PS in 2024, corresponding to a reasonable value range of 29.43-34.34 yuan, giving the company 0.50-0.65 times PEG in 2024, a reasonable value range of 27.95-36.34 yuan/share, comprehensive With the two valuation methods, the company's reasonable value range is 29.43-34.34 yuan/share, giving it an “superior to the market” rating.
Risk warning: policy risks such as electrophysiological harvesting; risk of market competition; risk of product penetration falling short of expectations; risk of failure of ongoing research projects.