Xiangyu Medical(688626) 中原证券·2024-09-25 09:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 22.90 yuan as of September 24, 2024 [1] Core Views - The company is a leading R&D-driven enterprise in China's rehabilitation medical device industry, focusing on five major business segments: assessment, training, physiotherapy, nursing, and assistive devices [1] - As of the first half of 2024, the company has obtained 324 medical device registration certificates/filing vouchers, 1,702 patents, 160 software copyrights, and 185 provincial-level scientific achievements [1] - The company's revenue for the first half of 2024 reached 338 million yuan, a year-on-year increase of 0.93%, while net profit attributable to shareholders decreased by 47.37% to 56.64 million yuan due to increased R&D and sales expenses [1] - The company is well-positioned to benefit from the "silver economy" trend, with nearly 100 types of rehabilitation medical devices suitable for elderly care [2] Financial Performance - In H1 2024, the company's gross margin was 68.22%, up 0.61 percentage points year-on-year, while the net profit margin decreased by 15.66 percentage points to 16.75% [1] - The company's expense ratios increased significantly: sales expense ratio rose by 4.64 percentage points to 27.99%, management expense ratio increased by 2.11 percentage points to 7.10%, and R&D expense ratio grew by 5.26 percentage points to 19.44% [1] - The company has maintained stable dividend payouts, with cash dividend ratios of 30.11%, 30.14%, and 36.36% from 2021 to 2023, and plans to maintain a dividend ratio of no less than 30% in 2024 [3] R&D and Innovation - The company has established a comprehensive testing center covering over 3,000 square meters with more than 300 advanced testing equipment, providing over 700 testing services for the entire product lifecycle [3] - The company is actively exploring cutting-edge technologies such as brain-computer interfaces, with ongoing projects including brain signal acquisition and analysis, and has developed prototypes for sleep assessment systems [3] - The company is leading a national key R&D project on "High-precision Biological Sensory Feedback Manipulation Technology and Systems" in collaboration with top research institutions [3] Industry Outlook - Rehabilitation medicine is recognized as one of the four major medical fields by the WHO, alongside preventive, clinical, and health medicine [1] - China's rehabilitation industry is still in its early stages of development, with significant growth potential driven by aging population and increasing health consumption [1] - The company's comprehensive solutions for elderly rehabilitation cover various aspects including pain management, stroke recovery, and cognitive disorders, positioning it well for the growing silver economy [2] Financial Projections - The company's EPS is projected to be 1.33 yuan in 2024, 1.56 yuan in 2025, and 1.87 yuan in 2026, with corresponding P/E ratios of 17.22x, 14.68x, and 12.25x [4] - Revenue is expected to grow from 819 million yuan in 2024 to 1.131 billion yuan in 2026, with growth rates of 10%, 15%, and 20% respectively [4] - Net profit is forecasted to increase from 213 million yuan in 2024 to 299 million yuan in 2026, despite a projected 6.4% decline in 2024 [4] Operational Metrics - The company's asset-liability ratio stood at 23.60% as of June 30, 2024, with a current ratio of 2.55 and quick ratio of 1.92 projected for 2024 [10] - Total asset turnover is expected to improve from 0.30 in 2024 to 0.36 in 2026, indicating better asset utilization efficiency [10] - The company's ROE is projected to increase from 9.57% in 2024 to 11.71% in 2026, reflecting improving profitability [10]