Incidents: The company achieved revenue of 1.74 billion yuan in 2022 (+6.48%, compared with the same below); achieved net profit of 230 million yuan (+0.67%); and achieved net profit of 200 million yuan (+4.94%) after deducting non-return mother's net profit (+4.94%). The performance fell short of our expectations.

The high base in the early stages compounded by the impact of the epidemic on apparent performance, and Q4 improved significantly in a single quarter. In 2022, the company's domestic sales business was affected by factors such as the epidemic, and project delivery was affected by factors such as the epidemic. At the same time, domestic and overseas business was affected by the high base in the previous period, and the apparent growth rate was affected. Q4 The company achieved revenue of 50 billion yuan (+34.47%) in a single quarter and achieved net profit of 0.4 billion yuan (+323.21%) to the mother. There was a significant improvement in the single quarter.

In terms of period expenses, the company's sales expenses in 2022 were 380 million yuan (+16.92%), and the sales expense ratio was 21.7% (+2pp); management expenses were 120 million yuan (+10.55%), and the management expenses rate was 6.6% (+0.22 pp); financial expenses were -20.82 million yuan, and the financial expense ratio was -1.2% (-1.54 pp).

The monitoring sector has basically escaped the impact of the epidemic, and the ultrasound and IVD sectors have performed brilliantly. In 2022, the patient monitoring business achieved revenue of 540 million yuan (-9.13%), and the decline narrowed sharply compared to the same period in '21 (-59.3% in '21). It has basically escaped the impact of the epidemic, and is expected to return to normal growth in the future. The ultrasound and IVD sectors performed well, achieving revenue of 250 million yuan (+34.66%) and 300 million yuan (+19.51%) respectively. We believe that with the company's comprehensive coverage of the lower middle and upper end of the ultrasound sector, the advantages of products, channels, hospitals, etc. accumulated earlier are gradually realized, the ultrasound business is expected to maintain high growth in the future. Furthermore, the maternal and child health sector achieved revenue of 300 million yuan (+12.72%), and the ECG diagnostic sector achieved revenue of 280 million yuan (+2.24%).

Investment in R&D continues to be strengthened, and the release of a variety of strategic new products lays the foundation for future growth. In 2022, the company's R&D expenses were 300 million yuan (+17.95%), and the R&D cost rate was 17.8% (+1.67 pp). Long-term and continuous high R&D investment helped the company release a variety of strategic new products, including iX series monitors, i20 blood gas, oxygen, electrolyte analyzers, molecular diagnostic products CL30, etc. Among them, the i20 blood gas analyzer was first marketed overseas in 22Q4. It is expected that 23H1 will be launched domestically, and the wet blood gas analyzer i500 research and development progress is also progressing steadily. Further enhance the company's comprehensive competitive strength in the field of strength. We believe that in the future, as new products are launched and sold one after another, the 23-year results are expected to be reaped.

Profit forecast and investment rating: Considering that the company's 22-year performance was affected by various factors such as a high base and delivery affected by the pandemic, we lowered the company's net profit forecast for 2023-2024 from 456/587 million yuan to 283/382 million yuan. The estimated net profit returned to the mother in 2025 was 523 million yuan. The current market capitalization corresponds to 2023-2025 PE 27/20/14 times. At the same time, considering that the impact of the company's epidemic is basically clear, 23 is expected to usher in a performance harvest period and maintain the “buy” rating.

Risk warning: New product promotion falls short of expectations, R&D progress falls short of expectations, exchange gains and losses, etc.