Performance summary: The company released its 2024 annual report. In 2024, it achieved revenue of 268.8 million/ +28.2%, net profit of 10 million/ +46.6%, and adjusted net profit of 26.9 million/ +2.9%.
The number of overseas cases has increased beyond expectations, and the international layout continues to be deepened. The company's overseas invisible correction revenue and number of cases continued to rise. In 2024, the international market revenue was 80.5 million US dollars/ +290.4%, and the number of cases where invisible correction was achieved was about 0.1407 million/ +326.4%. Among them, the number of 24H2 cases reached 0.083 million, and the number of overseas cases already accounted for 39.1% of the company's total number of cases. On the profit side, the operating loss of the company's international adjusted division in 2024 was 29.7 million US dollars. The main reason is that the company's initial investment costs are high in the early stages of global expansion. As subsequent sales scale expands and costs are diluted, international market losses are expected to narrow. Looking at the medium to long term, the international market is expected to further realize profit elasticity after entering the return period of investment.
The company will build a factory in the US and continue to improve its localization service capabilities. The company has successfully reached more than 1,000 dentists in 50+ countries and regions around the world, and the “global organization+local operation” strategy has achieved remarkable results. On March 13 this year, the company announced that it will build a new manufacturing plant in Wisconsin, USA, which is expected to become one of the most advanced braces manufacturing centers in the world. The construction of the US factory will help the company provide customized local production for North American customers and speed up demand response, and is an important milestone in the company's globalization strategy. The company is also expanding treatment plan planning and braces production scale in Brazil, and continues to build the Brazilian market.
The domestic market is operating steadily, and new products have been released in the field of early childhood correction. The company's revenue in the Chinese market in 2024 was 188.2 million US dollars, which was basically the same as the previous year, reaching about 0.2187 million cases/ +3.2%. The adjusted operating profit of the segment was USD 36.6 million, which was basically the same as the previous year. In the field of early childhood correction, the company released the “KiD Max” and “KiD Anti-Caries Edition” sub-product lines to build a full-life cycle early correction product matrix. The “KiD Anti-Caries Edition” gives invisible braces the dual function of dental protection and correction.
Investment advice: The company's 2025/2026/2027 EPS is expected to be $0.07/0.12/0.22, respectively.
The company is a leader in invisible orthodontics in China. It has a stable position as a leading domestic leader. In recent years, it has promoted global expansion. Overseas markets have performed well, two-wheel drive has strong growth potential, and maintains a “buy” rating.
Risk warning: industry competition increases risk; risk of overseas market expansion falling short of expectations; risk of medical malpractice.
