Key points of investment:
Incident: In 2023, the company achieved revenue of 7.972 billion yuan, a year-on-year increase of 12.25%, net profit to mother of 2,396 billion yuan, an increase of 50.21% year-on-year, after deducting non-net profit of 1,836 billion yuan, an increase of 46.79% over the previous year. In the fourth quarter of 2023, the company achieved revenue of 1,309 billion yuan, a year-on-year decrease of 34.08%, net profit of 205 million yuan, a year-on-year decrease of 55.36%, after deducting non-net profit of 165 million yuan, a year-on-year decrease of 43.19%. In the first quarter of 2024, the company achieved revenue of 2,231 billion yuan, a year-on-year decrease of 17.44%, net profit of 659 million yuan, a year-on-year decrease of 7.58%, after deducting non-net profit of 551 million yuan, a year-on-year decrease of 21.69%.
The respiratory treatment sector achieved significant growth, and the diabetes care sector accelerated development. The company's respiratory treatment solutions business increased 50.55% year on year in '23. Among them, the scale of the oxygen generator product business increased by nearly 60% year on year, the ventilator product business grew by more than 30%, and the nebulizer product sales business increased by more than 60% year on year.
The business scale of the diabetes care solutions business continued to increase 37.12% year on year; the business scale of the infection control solutions sector decreased by 36.15% compared to the high base of special market demand in the same period in 2022; the household electronic testing and in vitro diagnosis business increased 10.05% year over year, with the revenue scale of electronic blood pressure monitor products growing by more than 20% year on year; the emergency sector business achieved an 8.04% performance growth rate, and the self-developed AED product M600 continued to expand after certification; the overall scale of the rehabilitation and clinical device business decreased by 12.82% year on year, but The main products, such as wheelchairs, acupuncture and acupuncture, etc., are growing well.
Overseas market growth has resumed, and overseas market potential continues to be expanded. In 2023, the company achieved revenue of 727 million yuan overseas, an increase of 2.45% over the previous year. Overseas registration of the company's many products is gradually being implemented, and the geographical layout of overseas teams is becoming more and more perfect. By product line, the company's ventilator products have made significant progress in business development in some European countries since the first quarter of '24. The important performance parameters of the newly launched oxygen concentrator products have received good reviews from potential customers. The company plans to focus on developing the market demand for respiratory treatment products in Europe, North America and other regions; the company determines that diabetes care products have great potential for development in Latin America, Africa, the Middle East, Southeast Asia, etc.; at the same time, the company will also have certain opportunities in the Western European market based on household electronic testing products in North America, Western Europe, Southeast Asia, etc. Market conditions carry out strategic planning and business development work.
Profit forecast. We expect the company's 24-26 EPS to be 2.16, 2.48, and 2.85 yuan, respectively, and net profit to mother of 21.66, 24.91, and 2,859 billion yuan respectively. Referring to comparable company valuations, we gave the company 20-23 times PE in 2024, corresponding to a reasonable value range of 43.21-49.69 yuan, and gave it a “superior to the market” rating.
Risk warning: risk of product promotion falling short of expectations; risk of market competition; risk of overseas expansion falling short of expectations; risk of R&D progress falling short of expectations, etc.