occurrences

The company released its 2024 three-quarter report. In the first three quarters of 2024, the company achieved revenue of 0.331 billion yuan (yoy +13.81%), net profit of 0.096 billion yuan (yoy +13.37%), after deducting non-net profit of 0.088 billion yuan (yoy +22.81%). The gross sales margin is about 72.35%, and the net sales margin is about 30.41%.

2024Q3 achieved operating income of 0.102 billion yuan (yoy +18.75%), net profit due to mother 0.023 billion yuan (yoy -9.39%), deducting non-net profit of 0.022 billion yuan (yoy +0.46%). 2024Q3 has a gross sales margin of 70.90% and a net sales margin of about 24.09%.

Incident reviews

The pelvic floor business has remained stable, and reproductive rehabilitation is growing rapidly

In the third quarter of 2024, the company's revenue reached about 0.102 billion yuan, an increase of 18.75% over the previous year. Against the backdrop of the impact of tenders in the entire industry, the company's performance growth is invaluable. We expect the company's revenue from pelvic floor and postpartum rehabilitation channels to be basically stable, and the reproductive rehabilitation business will continue to grow rapidly. In the first half of 2024, the company's reproductive rehabilitation business achieved revenue of 0.056 billion yuan, a year-on-year high growth of 122%.

The company has now established a wholly-owned subsidiary, Nanjing Weizhilan Medical Devices Co., Ltd., which focuses on providing overall reproductive anti-aging solutions. It is a dedicated medical and aesthetic brand of the Meilander Group. Wei Zhilan officially set up a special team in 2021, with Zhu Bisheng, the company's former sales director, as the general manager. The service platform has more than 100 customers, fully covering leading first-line medical and aesthetic regions in China, including Beijing, Shanghai, Chengdu, Shenzhen, and Hangzhou.

The company continues to increase R&D expenditure and has a rich technology platform

In the third quarter of 2024, the company spent 0.014 billion yuan on R&D, accounting for 13.89% of revenue, and continued to maintain a high level of R&D investment. After years of continuous research and development, the company has formed a technical platform centered on electrophysiology technology, focused ultrasound technology, magnetic stimulation technology, high-frequency technology, laser technology, ultrasound imaging technology, etc., providing technical support for pelvic floor and obstetrics rehabilitation, reproductive rehabilitation, and anti-aging. The company is also planning more products under development, such as next-generation pelvic floor testing and treatment equipment, next-generation ultrasonic uterine restoration devices (automatic), next-generation magnetic stimulators, dual-wavelength picosecond laser therapy devices, 3D skin analyzer P2, AI morphology analyzers, and various laser medical and aesthetic devices. Subsequent new products will also continue to strengthen the company's competitiveness in the pelvic floor and medical aesthetic fields.

Investment advice

The company's 2024-2026 revenue is expected to reach 0.421 billion yuan, 0.519 billion yuan, and 639 million yuan respectively (previous values were 0.41 billion yuan, 0.507 billion yuan, and 629 million yuan), with year-on-year growth rates reaching 23.4%, 23.4% and 23.1%, respectively. Net profit to mother in 2024-2026 will reach 0.114 billion yuan, 0.146 billion yuan, and 184 million yuan, respectively (previous value 0.137 billion yuan, 0.177 billion yuan, and 219 million yuan), with year-on-year growth rates of 26.5%, 28.4%, and 26.1%, respectively. EPS for 2024-2026 was 1.14 yuan, 1.46 yuan, and 1.84 yuan, respectively, and the corresponding PE valuations were 22x, 17x, and 14x, respectively. Based on the successful launch of the company's new products in 2024, the “magnetoelectric film” combination has strong synergistic effects. The company is also vigorously expanding its medical and aesthetic business. New products+new business helped the company return to a high growth trend and maintain a “buy” rating.

Risk warning

the risk of new product development and promotion falling short of expectations;

Market competition heightens risk.