Items:

The company released its three-quarter report in 2023, with revenue of 2.166 billion yuan (+ 51.2%) in the first three quarters, net profit of 317 million yuan (+ 237.5%) and non-net profit of 230 million yuan (+ 153.7%). The income of 23Q3 company is 788 million yuan (+ 45.1%), the net profit is 82 million yuan (+ 92.8%), and the non-net profit is 81 million yuan (+ 94.5%).

Comments:

Revenue maintained high growth in the third quarter. The company's performance growth is mainly attributed to the following reasons: 1) the company has maintained continuous expansion in the past three years, which is the main reason for the company to maintain high performance growth; 2) in terms of business structure, the backlog of demand from some patients has been released since the beginning of this year and is expected to be gradually digested in the next 2-3 years.

Thanks to the good management ability, all the costs of the company are controlled within a reasonable range. In terms of gross profit margin, 23Q3 achieved a gross profit margin of 45.8%, an increase of 0.45pct over the same period last year. In terms of expense rate, 23Q3's sales expense rate / management expense rate / financial expense rate is 16.4% 12.6% 2.2%, respectively, compared with the same period last year-3.21pct/-1.23pct/+0.63pct, and each expense rate is well controlled. 23Q3 realized 82 million yuan (+ 92.8%) of net profit, 81 million yuan (+ 94.5%) of non-return profit and 10.3% (+ 2.62pct) of non-return net profit.

The release of the share buyback plan demonstrates long-term growth confidence. On 2023-9-4, the company issued a buyback announcement, intending to use the company's own funds to buy back 32,95-395400 shares, with a repurchase price ceiling of 151.74 yuan per share (a premium of 111.10 yuan over the closing price of the day) for employee stock ownership plans or equity incentives. This buyback helps to enhance the team cohesion and the core competitiveness of the enterprise, and is conducive to the long-term, healthy and sustainable development of the company.

Investment suggestion: in the future, as the hospital in the company moves towards maturity and the brand effect is enhanced, there is still much room for improvement in the expense rate, and the company may usher in the continuous release of revenue and profits. We expect the company's operating income from 2023 to 2025 to be 2.751 billion, 3.569 billion and 4.399 billion yuan, an increase of 59.4%, 29.8% and 23.3% year-on-year, and the net profit of 2.60,3.12 and 401 million yuan, up 1164.2%, 20.1% and 28.3% over the same period last year. With reference to comparable companies, and combined with the fact that the company is still in the stage of expansion and the future new construction or M & A projects are gradually landing, we will give 8 times PS in 2023, corresponding to a market capitalization of 22 billion yuan, and a corresponding target price of 147yuan. Maintain the recommended rating.

Risk tips: refractive surgery price war, the net profit fluctuation of new hospitals, medical accidents lead to the risk of public opinion and so on.