The company released its 24-year report, and the performance was steady. The company achieved 24H1 revenue of 20.53 billion yuan (+11.1% YoY); net profit to mother of 7.56 billion yuan (+17.4% YoY), a growth rate of 22.1% after excluding the impact of exchange gains and losses. Among them, 24Q2 achieved revenue of 11.16 billion yuan (YoY +10.3%) and net profit to mother 4.4 billion yuan (+13.7% YoY). 24H1's net operating cash flow is 8.5 billion yuan (+89.5% year over year), and the company plans to distribute an interim cash dividend of about 4.92 billion yuan to all shareholders, with a dividend ratio of over 65%.

The domestic market is growing steadily, and the international business is expanding smoothly. 24H1 achieved revenue of 12.62 billion yuan (+7.2% year over year) in the domestic market. Since industry restructuring and medical equipment renewal projects have not yet been implemented, the domestic equipment business is under pressure in the short term, but benefiting from the increase in demand for diagnosis and treatment such as outpatient and surgical treatment, the reagent and other consumables business grew rapidly and with high certainty, and the domestic IVD business grew by more than 25%. Second, 24H1's international business achieved revenue of 7.91 billion yuan (+18.1% year over year), and its international IVD business grew by more than 30%; regionally, the European market grew by 37.9%, and the Asia-Pacific region grew rapidly at a rate of 30.1%.

The three production lines have developed together, and the IVD business has performed well. Looking at production lines, 24H1's IVD business achieved revenue of 7.658 billion yuan (+28.2% year over year), with chemiluminescence growing by more than 30%. Furthermore, assembly line installations continued to accelerate, and the MT 8000 all-laboratory intelligent assembly line surpassed 100 installed units nationwide on the first anniversary of its launch. Second, the MIS business achieved revenue of 4.274 billion yuan (+15.5% year over year) in 24H1, benefiting from the ultra-high-end Resona A20 volume, and the high-end ultrasound series grew by more than 40%, further expanding the leading edge of ultrasound No. 1 in China. Meanwhile, the PMLS business achieved revenue of 8.009 billion yuan (-7.6% year over year), mainly due to continued delays in 2024 bidding and procurement activities. However, minimally invasive surgery grew by more than 90%, and hard mirror systems doubled.

Equipment leaders have significant advantages, and domestic and overseas businesses go hand in hand. From an industry perspective, domestic medical equipment procurement activities are generally on the sidelines this year, but with the gradual normalization of industry rectification and the successive issuance of ultra-long-term special treasury bonds and local government special bonds to support equipment renewal projects, equipment bidding and procurement is expected to gradually improve marginally. In the international market, the purchasing power of overseas customers will gradually recover as the US dollar interest rate hike cycle comes to an end. As an industry leader, the company's competitiveness will be further highlighted, and the future can be expected.

According to the 2024 mid-term report, we slightly adjusted the expense ratio and predicted that the company's earnings per share for 2024-2026 would be 11.51/13.71/16.55 (the original 24-26 forecast was 11.48/13.90/16.66), respectively. Based on comparable company valuations, the company was given 27 times PE valuation in 2024, and the corresponding target price was 310.77 yuan, maintaining the purchase rating.

Risk warning

New product releases fall short of expectations, collection policies exceed expectations, overseas expansion falls short of expectations, etc.