Core ideas
The company released its 2024 annual report, which is in line with market expectations. In 2024, the company achieved revenue of $0.269 billion, up 28.2% year over year; adjusted net profit of 26.86 million US dollars, +2.9%; net profit of 10.02 million US dollars, +46.6% year over year; net profit to mother of 12 0.11 million dollars, +60.8% year over year. It is expected that the growth rate of the invisible orthodontic industry in 2025 will still be affected by the domestic consumption environment, and the number of new domestic cases of the company will maintain a low single-digit growth rate. International business has become an important driving force for the company. The company has set up a local business team with rich experience in the orthodontic market in Europe, Australia, New Zealand, North America, etc., and it is expected that the number of the company's international business cases will continue to grow rapidly in 2025.
occurrences
Company Releases 2024 Annual Report
In 2024, the company achieved revenue of $0.269 billion, up 28.2% year over year; adjusted net profit of 26.86 million US dollars, +2.9% year over year; net profit of 10.02 million US dollars, +46.6% year over year; net profit to mother of 12.11 million US dollars, +60.8% year over year. EPS was 0.07 dollars.
Brief review
2024 results are in line with expectations, and the number of overseas cases is growing rapidly
In 2024, the company achieved revenue of 0.269 billion US dollars, an increase of 28.2% year on year; adjusted net profit of 26.86 million US dollars, +2.9% year over year; net profit of 10.02 million US dollars, +46.6% year over year. The adjustment items mainly include share payments of 11.29 million US dollars, amortization of 0.96 million US dollars related to acquisitions, fair value gains and losses of 1.16 million US dollars confirmed as profit and loss related to equity investments in unlisted companies, and foreign exchange profit and loss of 2.92 million US dollars. The total amount of adjustments is approximately $160.84 million.
By region, revenue from sales of invisible correction solutions in the Chinese market was about 1.0.8 billion US dollars, -1.35% year-on-year; adjusted segment profit was 36.64 million US dollars (segmented profit margin 19.5%, which remained relatively stable year-on-year). Revenue from invisible orthodontic appliances in overseas markets was about 74.01 million US dollars, +398% year over year; adjusted loss was 29.65 million US dollars (loss reduced by 1.6%), mainly due to the company's high sales expenses in the early stages of continued expansion in the international market.
All operating indicators are normal, and there are plenty of funds on the account
As the company's business expanded, sales expenses and management expenses increased a lot. In 2024, the company's sales expenses were 0.105 billion US dollars, 49. 9% year on year, and management expenses were 0.046 billion US dollars, +16.2% year on year. The sales expenses rate and management expense ratio were 39.1% (+5.66 pct year over year) and 17.2% (year-on-year -1.76pct), respectively. In 2024, the company's inventory turnover days was 56.59 days, a year-on-year decrease of 67.57 days; the number of accounts receivable turnover days was 20.33 days, a year-on-year decrease of 1.23 days. The company's operational efficiency improved, which is expected to be mainly driven by a sharp increase in overseas shipments.
The company has sufficient capital in its accounts. At the end of 2024, the company's monetary capital was 0.227 billion US dollars, financial assets included in profit and loss at fair value were 0.098 billion US dollars, term deposits were 0.112 billion US dollars, and the total amount of the company's financial interest and deposit income for the 2024 period was about 17.9 million US dollars, mainly reflected in other income and financial income accounts in the profit statement. The company's other financial indicators are generally normal.
China's leader in invisible orthodontics goes international
The company has now built a complete and differentiated product matrix, continuously refines and upgrades products, upgraded and innovated overall digital orthodontic solutions, and continued to deepen the moat. In the short term, the company's main profit is contributed by the domestic market. In 2024, the number of new domestic cases maintained a steady growth rate. The company's domestic case market share exceeded 41%, ranking first.
The international market space is larger. The company accelerates the layout of overseas markets and opens a second growth curve. The invisible orthodontics industry started earlier in the European, American and Australian markets, and the consumer power is stronger. The penetration rate of invisible orthodontics is higher than at home, and there is more market space. The company is the manufacturer with the second largest number of invisible orthodontic cases in the world. Currently, Invisalign has a high market share in Europe, America, and Australia, and the overall competitive pattern is good. Times Angel products are expected to become the second-choice brand for some clinics.
In 2022, the company launched a global strategy, began team formation and localized product development, and acquired 51% of Aditek, a leading manufacturer of orthodontic products in Brazil; in 2023, the number of cases in the company's international market was 0.033 million, accounting for 13.5%; in 2024, the number of international cases reached 0.14 million, increasing the proportion of new cases in the company to 39% in that year. The number of the company's overseas cases is expected to continue to grow rapidly in the next few years, gradually reversing losses and contributing to profit growth. In March 2025, the company announced that it will build a manufacturing plant in the greater Milwaukee area of Oak Creek, Wisconsin, USA, covering an area of about 4,830 square meters. In the short term, it may increase the operating costs of overseas business, and in the long run, it will help increase the certainty that the company will grow into a leading global orthodontic company.
More and more orthodontists from around the world choose Times Angel. The company has efficient and high-quality invisible correction solution design, perfect and high-quality logistics services, an excellent product portfolio, and a dedicated and professional localized service team. Compared to Europeans and Americans, East Asians have more complex cavities and smaller bodies, resulting in smaller dental arches and more difficult orthodontics. The company has accumulated experience with a large number of complex cases in China, which gives the company a certain advantage in going overseas. Combining rich experience and digital processes, the company has accumulated the ability to design efficient and high-quality invisible correction solutions, which can improve the efficiency of doctors' entire invisible correction process. China's labor costs are low, and the company has cost advantages in production, case design, etc. At the same time, it is expected that the overseas delivery cycle of products will not be weaker than Invisalign. At present, the company has set up localized direct sales business teams in the US, Europe and Australia to strengthen localization services.
The number of domestic cases is expected to maintain a low single-digit growth rate in 2025. In the short term, the company's main profit will be contributed by the domestic market. The company has established a stable market position in Tier 1 and 2 cities. It is expected that the growth rate of the invisible orthodontic industry in 2025 will still be affected by the consumer environment. The number of new domestic cases will maintain a low single-digit growth rate, and the profit side will remain stable. International business has become an important driving force for the company. The company has set up a local business team with rich experience in the orthodontic market in Europe, Australia, New Zealand, North America, etc., and it is expected that the number of the company's international business cases will continue to grow rapidly in 2025.
Profit prediction and investment advice
We forecast that in 2025-2027, the company's revenue will be 0.318, 0.373, and 0.429 billion US dollars, respectively, up 18.28%, 17.47%, and 14.87% year-on-year; net profit to mother will be 0.01, 0.014, and 0.02 billion US dollars, respectively, up -16.5%, 39.70%, and 44.37% year-on-year respectively. Based on the closing price on May 2, 2025 (HK$50.20 per share), the 2025-2027 PE was 109, 78, and 54 times, respectively. Maintain a “buy” rating.
risk analysis
1) Risk of overseas deployment falling short of expectations: Overseas doctors' approval and trust in the company's digital orthodontic solutions takes a certain amount of time and case accumulation, causing progress to fall short of expectations.
2) Risk of slow recovery in demand for orthodontics: Orthodontic terminals are more expensive, and may rank relatively low in consumer choices. Domestic orthodontic demand is recovering slowly, which may put some pressure on the company's short-term performance growth.
3) Risk of loss of talent related to orthodontic program design: The company's orthodontic solution design team includes talents from various fields such as medical treatment, engineering, and informatization. If related talents are lost, it may have a negative impact on the company's operations.
4) Industry risks: the risk of increased competition in the invisible orthodontic market at home and abroad, policy risks such as domestic orthodontic consumables collection, industry compliance risks, etc.
