Event: The company released its 2024 semi-annual report: achieved revenue of 0.823 billion yuan (+13.7% year over year).
Net profit attributable to mother was $54.801 million (-22.4% YoY), and net operating cash flow was 0.22 billion yuan (+98.8% YoY).
Comment:
The scale of the oncology business has grown, and full-cycle service capabilities continue to improve. 24H1's oncology revenue accounted for 28.8% of medical service revenue, and revenue increased 10.9% year over year. Among them, Friendship Hospital focused on upgrading the oncology experience. The number of cancer outpatients and hospitalizations increased 53.7% and 29.2% year on year, and oncology business revenue increased 28.8% year on year; Guangci Cancer Hospital focused on upgrading oncology technology. The number of cancer outpatients and admissions Q2 rose 12.3% and 12.1% month-on-month, and the proportion of cancer revenue in Guangci Hospital's medical revenue increased to 32.3%. The company focuses on minimally invasive and differentiated treatment, provides comprehensive treatment services for the full cycle of cancer, and continuously improves the prevention/diagnosis/treatment/rehabilitation ecology.
High-quality medical services open up room for growth, and AI helps differentiated development. The medical services sector achieved revenue of 0.608 billion yuan, an increase of 10.7% over the previous year. The company continues to explore innovative AI+ clinical applications to comprehensively improve diagnosis and treatment capabilities, experience levels and operational efficiency, and enhance patients' medical experience. At the same time, it meets the differentiated needs of users in terms of software and hardware, and proposes the “Yingkang Standard”. Driven by high-quality medical care, Friendship Hospital achieved revenue of 0.3 billion yuan, an increase of 24.8% over the previous year; Guangci Hospital Phase II is currently in trial operation and is expected to open 800 beds. 24H1's hospital business revenue is still growing well at a high base, and we are optimistic about the future development of the company's hospitals.
Medical devices cover four major scenarios, and the trend of high-end and internationalization is obvious. 24H1 Medical Devices achieved revenue of 0.215 billion yuan, an increase of 23.5% over the previous year. Products in the medical device sector achieve full coverage of the four major scenarios of radiation therapy, life support, image enhancement, and chronic disease treatment. In terms of image enhancement, the company continues to explore high-pressure infusion equipment and consumables scenarios. In terms of product innovation, the Discovery D series of high-pressure syringes developed by the company has obtained a medical device registration certificate and will lead the high-pressure infusion market. The number of overseas registration certificates for the company has increased to 75. In the future, it will continue to develop markets, continuously improve its global layout, and accelerate the globalization process.
Profit forecast, valuation and rating: The company is stable and steady, the quality of operating hospitals is steadily improving, and the layout of the equipment sector is expected to achieve steady growth. The company is expected to achieve steady growth, maintaining the 24-26 net profit of 0.126/0.157/0.195 billion yuan, corresponding to EPS of 0.20/0.24/0.30 yuan, and PE is 36/29/23 times, respectively, maintaining a “buy” rating.
Risk warning: Gamma knife sales fall short of expectations; merger and acquisition companies' performance falls short of expectations; risk of impairment of goodwill; hospital business growth falls short of expectations, etc.