Brief comment on performance

On October 29, 2023, the company released its third quarterly report of 2023. In the first three quarters of 2023, the company realized income of 2.166 billion yuan (+ 51%), net profit of 317 million yuan (+ 237%) and non-return net profit of 230 million yuan (+ 154%).

From a quarterly point of view, the income of Q3 company in 2023 is 788 million yuan (+ 45%), the net profit is 82 million yuan (+ 93%), and the non-return net profit is 81 million yuan (+ 94%).

Business analysis

The cost side is continuously optimized and the profitability is gradually realized. With the expansion of the company's business scale, the purchasing side's bargaining power is further improved, at the same time, the coordination of the company's chain operation model is improved, and the cost side is effectively optimized. In the first three quarters of 2023, the company's sales expense rate was 15.99% (- 2.6pcts), management expense rate was 12.14% (- 2.0pcts), and sales gross profit margin was 45.55% (+ 1.1pcts). On September 4, the company issued an announcement on the share buyback plan, which intends to buy back the company's shares at a price of no more than 151.74 yuan per share at a price ranging from 50 million yuan to 60 million yuan. The buyback shares are intended to be used in employee stock ownership plans or equity incentives at an appropriate time in the future, demonstrating the company's confidence in future business development.

Steadily promote the expansion plan, the business continues to transform and upgrade. In the first three quarters of 2023, the company completed the acquisition of **** Ophthalmology in Dongguan, and Shanghai Fengxian Puri and Hubei Puri opened clinics one after another, covering all municipalities directly under the Central Government and more than ten provincial capitals, and a number of new hospitals have completed site selection and are in the process of preparation. Since 2018, the company has taken the initiative to adjust its business structure and vigorously develop refraction, optometry and other non-health insurance settlement items. In optometry, the company has comprehensively promoted the fifth generation all-digital and intelligent keratoplasty lens matching technology to protect the improvement of service ability.

The echelon of talents has been continuously expanded and the discipline construction has been continuously improved. On August 8th, the company held the appointment of Professor Lu Yi and the establishment ceremony of Professor Lu Yi's famous doctor studio. With more than 30 years of clinical experience in cataract surgery, Professor Lu Yi, former director of ophthalmology and doctoral supervisor in the affiliated Otorhinolaryngology Hospital of Fudan University, was appointed as vice president and chief expert of cataract.

Lu Yi and other experts and professors have joined one after another to demonstrate the determination of the company's experts and talents to revitalize the hospital, constantly enhance the height and thickness of the company's talents, strengthen the training strength of young reserve talents and backbone forces, and promote the integrated development of medical, educational and research.

Earnings forecast, valuation and rating

The company continues to promote the "national chain + city integration" layout, we are optimistic that the company will maintain a good profitability. With reference to the results of the first three quarters, we have raised our 2023 net profit forecast by 12%. It is estimated that the company's net profit will be 3.24,3.18 and 426 million yuan respectively from 2023 to 2025, and 2.17,2.12,2.85 yuan for + 1477%,-2% and + 34% respectively compared with the same period last year. The current price corresponds to 50,51,38 times of PE, maintaining the "overweight" rating.

Risk hint

Hospital expansion is less than expected risk; medical safety accident dispute risk; market competition aggravates risk; shareholder reduction risk.