Incident Overview

23H1 has revenue of 1,378 million yuan (+55%), gross profit margin of 45.4% (+1.5pct), net profit attribution of 235 million yuan (+358%), net profit of non-return net profit of 149 million yuan (+205%), net non-return interest rate of 10.8% (+5.3 pct).

23Q2: Revenue was 728 million yuan (+73%), gross profit margin was 46.0% (+3.6 pct), net profit attributable to parent was 72.43 million yuan (+420%), minus 77 million yuan (+563%). With the expansion of the company's operating scale, the bargaining power on the purchasing side of the company has further improved, procurement costs have declined, and all expenses have declined, driving the increase in the company's gross margin and net interest rate levels as a whole;

23H1's expense rate control effect was good. The sales expense rate, management expense rate, and financial expense ratio were 15.8%, 11.9%, and 2.1% in that order, with year-on-year decreases of 2.2, 2.5, and 1.3 pct, respectively.

Refractive vision increased steadily, with a strong post-epidemic growth rate for basic eye diseases such as cataracts 23H1. Looking at the 23H1 subsector, refractive income was 7.1 billion yuan (+33%), gross profit margin was 53.0% (+0.7 pct); optometry revenue was 190 million yuan (+53%), gross profit margin of 45.7% (+2.9 pct), benefiting from overall consumption recovery; cataract revenue was 270 million yuan (+137%), gross profit margin of 43.4% (+8.1 pct), which is an increase in the company's brand awareness and reputation. Traditional advantage projects are gaining strength again; comprehensive eye diseases Revenue of $200 million (+71%), gross profit margin of 19.8% (+4.6 pct); steady progress in expansion plans to ensure revenue growth potential. 23H1 Shanghai Fengxian Purui and Hubei Puri Hospitals have opened clinics one after another and completed the acquisition of Dongguan **** Ophthalmology (23H1 achieved revenue of 100 million yuan and net profit of 27 million yuan). Currently, the company has set up 27 chain ophthalmology specialist hospitals, and a number of new hospitals have completed site selection work and are in the process of being prepared.

Hospitals newly opened in the past three years will be a new endogenous growth engine for Puri Ophthalmology in the future.

Performance forecasts and investment recommendations

Due to the company's impressive performance in the first half of the year and the certainty of the positive trend, we adjusted our profit forecast. We expected the company's revenue for 2023-2025 to be 2.80, 33.4, and 410 billion yuan respectively (original value was 2.57, 32.2, and 40.1 billion yuan), corresponding growth rates were 62%, 20%, and 23%, respectively; net profit of Gimu was 3.1, 3.2, and 4.1 billion yuan (original value was 2.4, 2.1, 280 million yuan). The corresponding growth rates were 1418%, 2%, and 30%, respectively. The values are 1.6, 1.4, and 1.9 yuan); corresponding to the closing price of 106.4 yuan/share on August 31, 2023, PE is 51/50/39X, respectively; the “increase in holdings” rating is maintained.

Risk warning

The pace of expansion is slower than expected; the risk of medical accidents or negative industry events; the risk of increased competition in the industry; the risk of performance falling short of expectations due to the continued recurrent COVID-19 pandemic; and industry policy risks.