Key points of investment:

The company released its 2024 three-quarter report.

24Q1-3 achieved revenue of 0.427 billion yuan (+23.5% YoY), net profit of 0.197 billion yuan (YoY +37.9%), deducted non-net profit of 0.192 billion yuan (YoY +36.5%), and achieved a gross profit margin of 72.23% (YoY +2.71 pct).

Single Q3 achieved revenue of 0.163 billion yuan (YoY +16.3%), net profit of 0.073 billion yuan (YoY +13.4%), and deducted non-net profit of 0.072 billion yuan (YoY +12.6%).

Overseas revenue growth continues to be impressive, and overseas channels continue to expand and gain strength.

24Q1-3 achieved domestic revenue of 0.203 billion yuan (+14.44% year over year). Under the influence of collection, the company adjusted its sales strategy in a timely manner for non-volume regions and accelerated the construction of a platform model.

24Q1-3 achieved overseas revenue of 0.222 billion yuan (+33.2% year over year), sales revenue in the North American market +48.3% year over year, sales revenue in the Asia Pacific market +81.9% year over year, and sales revenue in the South American market +42.7% year over year. With 20 new overseas cooperative customers, the company is vigorously expanding the South American and Asia-Pacific markets on the basis of consolidating the European market and boosting customer development in the North American market.

In terms of overseas markets, the company has begun operating a Dutch branch in Europe and has set up a factory in Thailand (production and sales are expected to be achieved in 25Q2). The goal is to open a US branch in 25. Overseas production capacity and channel construction are expected to drive continued high growth in overseas markets.

Continuous investment in R&D, smooth promotion of new products at home and abroad.

By the end of September '24, the company's R&D personnel ratio reached 22.2% (+6pct compared to the same period in '23). The company insists on product technology innovation as the main line. 24Q1-3 spent 41.44 million on R&D, +46.8% over the same period last year. Replaceable hemostatic clips have been promoted smoothly at home and abroad. Dozens of domestic hospitals have already been admitted, and new overseas markets are expected to achieve mass sales in 24Q4.

Profit forecasting and investment advice

Maintaining the previous profit forecast, we expect the company's 2024-2026 net profit to be 0.274/0.358/0.464 billion yuan, with a CAGR of 28.8%. Maintains a “buy” rating in view of the technologically advanced nature of the company's innovative products.

Risk warning

Procurement policy risks; overseas private brand product promotion progress falls short of expectations; bipolar product marketing falls short of expectations.