Incident: In the first three quarters of 2024, Furui Co., Ltd. achieved revenue of 0.98 billion yuan (+ 21.42%), net profit of 0.102 billion yuan (+ 39.42%), and net profit of 0.097 billion yuan (+ 21.98%) after deducting non-return to mother. Among them, Q3 achieved revenue of 0.337 billion yuan (+ 19.37%), net profit to mother of 0.027 billion yuan (-9.22%), and net profit of 0.022 billion yuan (-31.38%) after deduction. Excluding the impact of equity incentive fees, the net profit for Q3 alone was 0.043 billion yuan (+28.38%), and the results were in line with expectations.

The net profit growth rate of Echosens is expected to reach a major inflection point: listed companies control 50.09% of Echosens' shares, and minority shareholders' equity is basically the equity of non-controlling shareholders of Echosens. Its 24Q3 single was 0.021 billion yuan, a year-on-year increase of 46.04%, reversing the decline in net profit in the first half of the year.

The successive launch of new drugs for metabolism-related fatty liver disease (MAFLD) will accelerate Echosens' performance: Madrigal's Resmetirom was launched in March of this year, becoming the first new drug in the MAFLD field. It is mainly used in hepatology departments. This department is a department with relatively high FibroScan coverage, which contributes relatively little to the increase in performance. However, GLP-1 is expected to become a major target for MAFLD. GLP-1 has shown great results in reducing liver fat and metabolism (MAFLD is more a concomitant disease caused by type 2 diabetes and obesity), and will focus more on scenarios such as endocrinology and primary care. This is FibroScan's main driving force in the future. Simeglutide is expected to disclose MAFLD's registration phase III data in 24Q4, and the listing of the relevant certification will boost FibroScan's high growth. Due to the low penetration rate of FibroScan in endocrine and primary healthcare scenarios, it is necessary to install instruments before new drugs are marketed to ensure screening and patient tracking throughout the process, so FibroScan will take the lead in dosage. In addition, large GLP-1 companies also include major multinational pharmaceutical companies such as Eli Lilly, Boehringer Ingelheim, and MSD, which has rapidly raised awareness of MAFLD, and the successive marketing of drugs has led to a rapid expansion of MAFLD screening and treatment groups, which is reflected in Frey's performance.

Investment proposal: The company's 2024-2026 revenue is expected to be 1.594/2.299/3.225 billion yuan, and net profit to mother 0.201/0.31/0.473 billion yuan. The corresponding PE was 64.26/41.57/27.26 times, respectively, maintaining the “buy” rating.

Risk warning: The company's FibroScan sales progress fell short of expectations; MAFLD drug approval fell short of expectations; risk of uncertainty over the transfer of minority rights in Echosens.