Incident: 24H1 achieved revenue of 1.334 billion yuan (+16.28%, same below), net profit due to mother 0.31 billion yuan (+17.47%), net profit of 0.306 billion yuan (+18.25%) after deducting non-return to mother net profit of 0.306 billion yuan (+18.25%). 24Q2 revenue achieved 0.714 billion yuan (+19.55%), net profit attributable to mother 0.167 billion yuan (+2.57%), and net profit not attributable to mother 0.165 billion yuan (+3.35%).
The company's performance for the first half of the year met our expectations.
Overseas performance was impressive in the first half of the year, with gross profit margin and net margin rising steadily over the same period of the previous year: by region in the first half of 2024, domestic revenue was 0.706 billion (+1.73%); overseas revenue was 0.624 billion (+39.72%), accounting for 47% of revenue. Among them, MTU (American Sales Regional Subsidiary) revenue was 0.28 billion (+38.6%, accounting for 18%), and MTE (European, Middle East, and Africa sales regional subsidiary) revenue 0.22 billion (+53.9) %, accounting for 16%), Asia-Pacific overseas revenue of 0.116 billion yuan (+16.4%, accounting for 9%); Kangyou Medical achieved revenue of 0.13 billion yuan (+19.3%). Thanks to the smooth expansion of overseas markets, the company had a gross profit margin of 67.94% (+4.2pct) and a net profit margin of 23.99% (+0.63pct) in the first half of 2024.
Actively promote overseas channel construction: In the first half of 2024, the US subsidiary continued to consolidate local sales team reforms and achieve significant profit increases through measures such as regional segmentation and optimization of the salary assessment system; established a European regional headquarters to perform regional management functions on behalf of the company headquarters to manage business development, market planning, communication and coordination, and regional services within the European region; the newly acquired Portuguese and Swiss channel companies became new grippers for European business development; established an Australian representative office to enhance the company's profitability and comprehensive competitiveness. Meanwhile, Nanwei's production base construction project in Thailand has gradually completed production and infrastructure plans and is scheduled to be put into operation in 2026. The aim is to establish a safe global supply chain and further expand the Southeast Asian market.
In the first half of the year, the company made continuous progress in research projects: in the first half of this year, the company invested 69.58 million yuan in R&D and 21.65 million yuan in visualization projects, accounting for 31.14% of the total R&D investment. Single-use internal medicine cholangioscopy was successfully promoted in international markets such as Europe, America, and Japan, and gradually entered the hospital market. At the same time, the company is actively reserving disposable endoscopes for more application scenarios and actively exploring leading new endoscopes. Research and development of basic consumables is also progressing smoothly. Many key R&D projects, such as next-generation three-arm clamps and ERCP upgrades, are progressing according to plan.
Profit forecast and investment rating: We consider that domestic regional collection is still affected, and we lowered net profit to mother in 2024-2026 from 0.612/0.771/0.968 billion to 0.609/0.764/0.932 billion yuan. The PE valuation corresponding to the current market value is 17/14/11 times, respectively. In view of the company's smooth overseas market promotion, the “buy” rating was maintained.
Risk warning: There is a big risk that domestic consumables collection prices will drop, overseas tariff risks, new product approval and marketing will fall short of expectations, etc.