A provider of medical grade remote health monitoring equipment and services, turning a loss into a profit in 23 years. Since its establishment in 2000, the company's product matrix has been continuously enriched, and its strategic positioning has gradually become clear. It has gradually transformed from the three traditional categories (scales+wearable products+blood pressure monitors) to a provider of medical remote health testing equipment. After the contraction of the consumer electronics foundry business in 2022 and corresponding impairment charges, the company restructured a pyramid business structure from hardware and software to services. Based on medical-grade health monitoring hardware equipment, the remote health management business (RPM) was formed after being empowered by software, and a digital medical service business naturally formed on this basis. The company has integrated software and hardware R&D and manufacturing capabilities, and has global medical device qualifications, and is expected to be the first to open up the domestic blue ocean market for medical services.
He has been deeply involved in the field of smart health for 20 years and has medical device qualifications in mainstream countries around the world. The company is deeply involved in the R&D, design and manufacture of devices such as healthcare products and smart wearable products. It has leading global customers such as Weilun, WITHINGS, Braun, and Philips, accounting for about 80% of related revenue. The company has a multi-dimensional sign monitoring product line in the field of health IoT. The products include electronic blood pressure monitors, fat meters, medical-grade health watches, smart ECG stickers, etc. that have been certified as Class II medical devices. In '23, the company launched new smart blood sugar monitors, OTC hearing aids, etc., which continue to drive the steady growth of the company's business.
Remote health management solutions benefit from increased RPM penetration in European and American countries. RPM uses advanced sensors, mobile devices, and communication technology to measure and transmit users' vital sign data, and send the data back to healthcare providers to provide personalized health services to users. At present, the company has established deep cooperation with many leading European and American RPM customers such as Teladoc, Livongo, and Lark to provide full-process solutions from hardware development to data analysis and customer feedback, profoundly benefiting from the rapid development of the European and American RPM industry. As global medical insurance spending increases, the RPM solution business is expected to usher in rapid growth.
Develop a new domestic digital health service market based on RPM's overall delivery capacity. The company actively explores new domestic medical service markets based on its deep R&D and manufacturing capabilities of medical-grade smart health equipment, software research and development advantages, medical industry resources, etc. Focus on the field of cardiovascular chronic diseases and lay out two major innovative businesses in depth: digital blood pressure management services and remote dynamic ECG services. At present, the remote dynamic ECG service business has gradually been implemented in application scenarios such as “two-stage risk screening” and “post-operative prognostic management”.
Profit forecast and valuation: The company's net profit for 2024-26 is estimated to be 0.50/0.64 billion yuan (+46.0%/28.1%/31.4%), and EPS is 0.23/0.30/0.39 yuan, respectively. Based on the relative valuation of comparable companies, and considering that the company's medical service business is leading and pioneering in China, which is expected to support the company's rapid growth in performance in the next few years, we gave the company a 24-year PEG 0.86-0.89 with a target price of 11.57-12.03 yuan, giving it a “buy” rating.
Risk warning: New product technology falls short of expectations, customer expansion falls short of expectations, risk of medical policy changes.