口腔CBCT 和色选机出口拖累收入表现。3Q24 收入同比-6.11%，我们判断主要系口腔CBCT 行业需求仍较为低迷同时价格竞争加剧、致使公司收入承压，同时色选机出口增速受到高基数+海运等影响有所波动。3Q24 results fall short of market expectations
The company announced its 2024 three-quarter results: revenue of 1.578 billion yuan from the 1st to 3Q24, -4.78% year on year; net profit to mother 0.45 billion yuan, -20.09% year on year. Single 3Q24 revenue was 0.648 billion yuan, -6.11% YoY; net profit to mother was 0.178 billion yuan, -17.88% YoY. The performance fell short of market expectations. We determined that it was mainly due to weak demand for dental CBCT and profit pressure due to price competition.
Development trends
Exports of dental CBCT and color sorters dragged down revenue performance. 3Q24 revenue was -6.11% year-on-year. We judge that demand in the dental CBCT industry is still sluggish, and price competition is intensifying, putting pressure on the company's revenue. At the same time, the export growth rate of color sorters fluctuated due to high base+shipping.
Dental CBCT price competition reduces profitability; exchange losses increase financial expenses. The 3Q24 company's gross profit margin was 49.8%, -2.06ppt year over year. We judge that it was mainly affected by price competition in the dental CBCT business and the increase in the share of the color sorter business with low gross margin. 3Q24 The company's sales/management/R&D/finance expense ratios were 11.5%/3.9%/5.6%/0.5%, respectively, compared with +1.01pp/ flat compared to +1.01pp/ +0.17pp/ +1.12ppt. Among them, we judge that the increase in the financial expense ratio was mainly affected by exchange losses. The 3Q24 company's net profit margin was 27.5%, year-on-year -3.94ppt.
The quality of the company's operations is maintained, and cash flow continues to improve. The company's annualized ROE for the third quarter was 22.54%, reflecting the company's good operating quality. Net cash flow from 3Q24 operating activities was 0.306 billion yuan, +41.82% year over year and +32.43% month on month. Cash flow continued to improve.
Optimistic about the competitiveness of the company's color sorters, waiting for the dental CBCT boom to recover. We are optimistic about the company's market competitiveness as a leader in the color sorter industry. In the future, it is expected to contribute to revenue growth through increased domestic market share and overseas market development; the dental CBCT industry is sluggish in the short term but has room for long-term growth. We are optimistic about the inflection point in demand in the subsequent industry.
Profit forecasting and valuation
Due to pressure on the dental CBCT business, we reduced 2024/2025 net profit by 14.7%/15.6% to 0.632 billion yuan/0.688 billion yuan. The current stock price corresponds to the 2024/2025 price-earnings ratio of 21.7/19.9 times.
Maintaining an outperforming industry rating, considering the upward trend in the industry's valuation center, maintaining a target price of 18.00 yuan, corresponding to 25.1 times the 2024 price-earnings ratio and 23.1 times the 2025 price-earnings ratio, with 15.7% upside compared to the current stock price.
risks
Material prices are rising, overseas markets are not expanding smoothly, there is a risk of exchange rate fluctuations, and CBCT competition is intensifying.
