More than 30 years of experience have created a leader in domestic equipment, and dual drives at home and abroad have become the most popular in the world. More than 30 years of innovation and development have created a leading domestic medical device, and the three core production lines have been vertically iterated to build a basic operating market, and horizontally expand seed businesses such as cardiovascular, minimally invasive surgery, and veterinary medicine to cultivate future growth potential. The company's products have covered nearly 0.11 million medical institutions and more than 99% of the top three hospitals in China. As favorable policies such as new medical infrastructure and medical equipment renewal continue to advance, domestic leaders with complete production lines are expected to maintain rapid growth. The company adheres to two-wheel drive at home and abroad, and achieved overseas revenue of 13.5 billion yuan in 2023, accounting for 39% of overseas revenue. The company has established a global R&D, marketing and service network. It has 62 overseas subsidiaries in 40 countries/regions, and has 12 global R&D centers, and its products are exported to more than 190 countries and regions. Strong product strength and extensive channel layout have set the foundation for overseas high-end breakthroughs, and the global layout is expected to lead overseas markets to accelerate breakthroughs.

The three core sectors have been profoundly changed to establish a solid foundation for long-term development. Vertical changes in the three major sectors have built the foundation for long-term growth, and independent R&D and innovation have achieved strong product strength. 1) Life information and support: The company's traditional dominant business has the largest domestic market share for products such as monitors, defibrillators, anesthesia machines, ventilators, and light towers. As new infrastructure releases 10 billion dollars in market growth, production lines are expected to achieve steady growth. 2) In vitro diagnosis: The 100 billion in vitro diagnosis market space is broad, the company's production line layout is complete, and breakthroughs have been made in various segments. The chemiluminescence production line is abundant, and the high-end instrument CL-8000 i continues to be released, helping the company break through the high-end customer base at home and abroad. The performance of high-end biochemical instruments is comparable to that of overseas, and actively embraces collection to surpass the biochemical reagent market share curve. Blood diagnostic instruments are complete, coagulation analyzers continue to iterate and catch up with overseas performance, and the market share of blood cells surpassed imports and became number one in the country. 3) Medical imaging: The company's production line focuses on the field of ultrasound. Domestic ultrasound equipment is mainly concentrated in the middle and low end, and there is still plenty of room for domestic replacement in the high-end field. The company continues to expand its high-end I series and high-end R series. The ultra-high-end product A20 will be launched in 2023. Revenue structure optimization is expected to drive profitability to continue to rise.

Endogenous epitaxial nurtures emerging businesses and enters the top 10 global medical devices of the future in cardiovascular consumables. Epitaxial mergers and acquisitions are the genes of the company's growth. In 2021, it acquired Hyptide Biotech to solve the IVD raw material problem; in 2023, Desai Diagnostics was acquired to introduce and improve the overseas in vitro diagnosis business supply chain platform. In 2024, the company entered the field of cardiovascular consumables through the acquisition of Huitai Medical, bringing innovation in product development and improvement of global marketing capabilities to both parties. The long-term trend in clinical usage of consumables products is improving, and by betting on the consumables sector, companies can hope to advance to the top 10 global medical devices in the future. The company actively cultivates seed businesses such as minimally invasive surgery, veterinary medicine, AED, and orthopedics. The diversified layout greatly enhances the available market space, and the multi-core drive provides strong growth potential.

Profit forecast and investment rating: We expect the company's revenue for 2024-2026 to be 42.125, 50.755, and 61.048 billion yuan, respectively, up 20.6%, 20.5%, and 20.3% year-on-year; net profit to mother will be 14.02, 16.933, and 20.591 billion yuan, respectively, up 21.0%, 20.8%, and 21.6% year-on-year, respectively, for the first time coverage, giving a “buy” rating.

Risk warning: industry policy risk; risk of marketing falling short of expectations; risk of international trade friction; risk of data lag.