Incidents:
The company released its 2023 annual report. Net profit of 2023 was 7.972 billion yuan, up 12.3% year on year; net profit from non-return to mother was 2,396 billion yuan, up 50.2% year on year; net profit after deducting non-return to mother was 1,836 million yuan, up 46.8% year on year; 2024Q1 revenue was 2.31 billion yuan, down 7.6% year on year; net profit after deducting non-return to mother was 551 million yuan, down 21.7% year on year; 2024Q1 revenue increased 70.48% month-on-month, net Profit increased 221.39% month-on-month, and net profit after deducting non-return to mother increased 233.05% month-on-month.
Comment:
Each business segment has its own highlights, and the prospects are promising
In 2023, the company's respiratory treatment solutions business achieved significant growth of 50.55% year-on-year. Among them, the scale of the oxygen generator product business increased by nearly 60%, the ventilator product business grew by more than 30%, and the atomization product sales business increased by more than 60% over the same period of the previous year; the company's diabetes care solutions business continued to achieve excellent results, and the revenue scale increased 37.12% year over year; the business scale of the company's infection control solutions sector declined compared to the high base of special market demand in the same period in 2022. The company will continue to actively expand specialist sensory control through market segmentation The new circuit and civilian product business line continuously strengthened brand influence and team execution to promote the steady development of the corresponding business; the company's household electronic testing and in vitro diagnosis business increased 10.05% year on year, with the revenue scale of electronic blood pressure monitor products growing by more than 20% year on year. With excellent product quality and service capabilities, sales work in various channels within the sector was carried out efficiently, and the business prospects of the sector were promising; the company's emergency sector business achieved a performance growth rate of 8.04%. After the self-developed AED product M600 was certified, with the cooperation of various production, R&D and operation departments at home and abroad business Continued expansion; the overall scale of the company's rehabilitation and clinical device business declined slightly compared to the same period in 2022, but the main products in the sector, such as wheelchairs, acupuncture and moxibustion acupuncture, etc., are growing well, and the market position is stable, which has contributed strongly to the long-term steady development and output of the company's operations.
The company's profitability continued to improve in 2023
In 2023, the company's expenses for the period were 1,856 billion yuan, an increase of 0.23% over the previous year. Among them, R&D expenses were 504 million yuan, accounting for 6.33% of the company's revenue, and management expenses were 411 million yuan, a year-on-year decrease of 2.22%. The company continues to increase investment in R&D, and while improving R&D capabilities, it also focuses on improving the efficiency of the utilization of various expenses and resources. The overall cost trend continues to improve. In 2023, the company's product structure was optimized. At the same time, through effective cost management methods and an increasingly mature supply chain system, the company continued to reduce costs and increase efficiency and continue to promote lean production. The company achieved a gross sales margin of 51.49%, an increase of 3.36 percentage points compared to 2022. The company's performance in Q1 2024 increased significantly from month to month.
Profit forecast: We expect the company's revenue for 2024-2026 to be 86.61/97.68/11.159 billion yuan, respectively (the value before 2024 was 9.484 billion yuan), and net profit to mother will be 22.08/24.285/2,785 billion yuan (the value before 2024 was 1,978 billion yuan). Referring to the company's Q1 revenue in 2024, we lowered our 2024 revenue forecast conservatively. Considering the increase in the company's gross margin in 2023, the company also focuses on improving the efficiency of the utilization of various expenses and resources, and the overall cost trend continues to improve. Based on the company's increased profitability, we raised our 2024 net profit forecast (the previous forecast did not take into account factors such as increased gross margin and the company's focus on improving the efficiency of the use of various expenses and resources) to maintain the “buy” rating.
Risk warning: the risk that commercialization of new products falls short of expectations, policy risks, competition increases risks, etc.