Introduction to this report:
The company's OK Mirror Inspection and Optometry Center construction were affected by the epidemic in 2022, and both are expected to gradually resume in 2023.
Key points of investment:
Maintain a prudent increase in holdings rating. The company achieved revenue of 1,525 million yuan (+17.78%) in 2022, net profit of 624 million yuan (+12.44%), and net profit of 560 million yuan (+14.69%) after deducting non-return mother's net profit of 560 million yuan (+14.69%); of these, 202Q4 achieved revenue of 314 million yuan (+5.1%), and Guimo's net profit of 118 million yuan (+6.0%). The performance was in line with expectations. Considering that the recovery in sales requires climbing, the 2023-2024 EPS was lowered to 0.90/1.14 yuan (previously 0.95/1.23 yuan), the 2025 EPS was increased by 1.43 yuan. Considering the decline in sector valuation levels, the target price was lowered to 36.43 yuan, corresponding to PE40X in 2023, maintaining a cautious increase in holdings rating.
OK mirror sales are expected to gradually resume. In terms of products, ① OK Mirror achieved revenue of 763 million yuan (+11.04%) in 2022. OK Mirror Inspection was affected by the epidemic in many months throughout the year, and is expected to gradually recover in 2023. The gross profit margin was 89.62% (+0.33pct), a slight increase, which is expected to be related to the increase in the share of the DreamVision series. ② Nursing products achieved revenue of 298 million yuan (19.58%, YOY +30.81%); ③ Framed mirrors achieved revenue of 202 million yuan (+3.03%).
Healthcare services are growing rapidly, and terminal construction is expected to accelerate in 2023. Medical services achieved revenue of 253 million yuan (16.58%, YOY +42.90%). The company vigorously developed the optometric terminal business, which also showed that the number of medical institutions continued to increase. Some self-built and acquired targets in 2022 were delayed due to the epidemic. It is planned to invest another 4-5 billion new optometry service terminals in 2023, which is expected to resume a normal pace of expansion.
Research projects are progressing smoothly, and the product matrix has been further enriched. The company's ongoing research projects made good progress in 2022. Three characteristic lenses of DV have been developed, including a small optical area, small diameter, and ultra-thin thickness. OK lens user groups are more segmented; most clinical observations of ultra-high oxygen permeability OK lenses have been completed, parts of sclera lenses have been incorporated, and product development such as focal frame lenses has been reduced, and the product matrix has been further enriched.
Risk warning: competition increases risk, commercialization of new products falls short of expectations, etc.