[Case: _S Gongum Si Ma Fa RYBu] 2023 Annual Report: Achieved revenue of 2,654 million yuan/yoy +24.6% in 2023, realized net profit of 416 million yuan/yoy +130.6%, and realized net profit of 383 million yuan/yoy +141.5%; in a single quarter, 23Q4 achieved revenue of 672 million yuan/yoy +22.7%, achieving net profit of 89 million yuan/yoy +377.1%, achieving net profit deducted from non-return mother of 0.79 million yuan/ YOY +330.8%

Haimei continues to grow at an excellent rate, and it can be expected that fourth-generation hyaluronic acid will be approved. In '23, the medical and aesthetic business achieved revenue of 1,057 million yuan/yoy +41.27%, and 23H2 achieved revenue of 572 million yuan/yoy +36.38%. 1) Hyaluronic acid products: achieved revenue of 602 million yuan/yoy +95.54% in 2023. By brand, Haimei/Haiwei/Jiaolan hyaluronic acid increased by 129%/94%/58% year on year respectively. Among them, Haimei achieved revenue of over 230 million yuan, accounting for about 38% of hyaluronic acid revenue, and continued to perform well. Fourth-generation organic crosslinked hyaluronic acid products are currently in the late stages of registration and review. It is expected that the company's high-end hyaluronic acid pipeline layout will continue to be improved after the product is approved. 2) Human Epidermal Factors: Achieved revenue of 171 million yuan/yoy +13.58% in 2023, the increase was mainly due to the company's enhanced academic promotion of human epidermal growth factor products, and the product application department was significantly broadened; 3) RF and laser equipment: achieved revenue of 284 million yuan/yoy -1.97% in 2023. Sales of household and lifestyle beauty grade products in the RF equipment product line in mainland China were affected to a certain extent by policy changes such as adjustments to the radiofrequency therapy device regulatory category, but the brand has radiofrequency with Class III certification, which is currently scarce in the market The product “EndyMedPro” achieved rapid growth in 23 years.

Crystal China has been selected comprehensively. The overall ratio of high-end bifocal products is high, and the performance of optometry terminal products is weak due to weak consumption power. In 2023, ophthalmology achieved revenue of 928 million yuan/yoy +20.57%, of which 23H2 achieved revenue of 448 million yuan/yoy +8.17%: 1) Cataract surgery products: achieved revenue of 497 million yuan/yoy +35% in 2023, 23H2 increased 18% year-on-year, of which artificial crystal revenue was 382 million yuan/+yoy 37%, and ophthalmic viscoelastic revenue was 115 million yuan/ +29%. The second half of the year was mainly affected by national centralized procurement expectations in November 23, but Its intraocular lens products were fully selected, and sales of the high-end bifocal SBL-3 increased 69% year over year. In terms of research and development, innovative hydrophobic aspherical artificial crystals were approved in June 23, astigmatism products were registered in February '24, clinical trials of hydrophilic aspheric polyfocal began in November '22, and clinical trials of hydrophobic aspheric trifocal were launched in July '23, leading the way among domestic crystal manufacturers. 2) Optometry and refractive products: In addition to achieving revenue of 401 million yuan/yoy +5.82% in 2023, the optometry materials operated by Contamac achieved revenue of 209 million yuan/ +20.17%, and some were affected by hydrophobic molded crystal embryo products (self-developed, 180% year-on-year increase) affected the apparent growth rate; optometry terminal products achieved revenue of 192 million yuan/yoy -6.34%. In addition to the sales base of Hebei Xinshikang in July '22 (13.51 million yuan), we expect to be mainly affected by the sales base of Hebei Xinshikang in July '22 (13.51 million yuan) This is due to the slowdown in the growth of the OK mirror product industry under weak consumption power.

The leading position of the largest manufacturer of orthopedic joint cavity viscoelastic supplements in China is stable, and surgical products have declined. 1) Orthopedic products: Achieve revenue of 476 million yuan/yoy +22.56% in 2023. The company is actively expanding OEM services for sodium hyaluronate injections, increasing production capacity utilization and driving continuous growth in product revenue. Sodium hyaluronate injection/medical chitin sugar (for intra-articular injections) achieved revenue of 314/162 million yuan respectively in 23, an increase of 20.83%/26.05% over the previous year. 2) Anti-adhesion and hemostatic products: Achieved revenue of 146 million yuan/yoy -17.32% in 2023, mainly due to policy factors such as cost control for high-value consumables.

Increased gross margin of the medical and aesthetic business+cost ratio optimization drive overall profitability improvement. The company's gross margin in 2023 was 70.50% /yoy+1.5pct. By business, the gross margin of ophthalmology/medical/orthopedical/anti-adhesion and hemostasis products in 2023 was 59.11%/77.45%/80.07%/68.42%, respectively, +0.28/+4.34/-2.12/+0.64pct, respectively. The gross margin of the medical and aesthetic business increased significantly, or stemming from the continuous increase in the proportion of high-end hyaluronic acid products. Looking at the cost ratio, the company's sales/management/finance/R&D expenses in 2023 were 30.69%/15.74%/-2.34%/8.29%, respectively, -1.21/-3.14/+1.13/ -0.26pct, respectively. The cost ratio side was also significantly optimized.

Profit forecast: The company's Jiaolan Lips Lip Enhancement & Haimei Hyaluronic Acid is expected to continue to be released, Haimei Yunjing is about to be approved, or may be expected to support continued high growth in the medical and aesthetic business and drive increased profitability; artificial crystal collection is fully approved, multiple high-end products are clinically advanced, and medium- to long-term growth is worth looking forward to; we expect the company to achieve revenue of 31.0/36.2/4.19 billion yuan in 24-26, up 16.8%/16.7%/15.9% year on year, achieving net profit of 5.3/6.4/76 billion yuan, respectively. 27.5%/20.0%/19.8%, corresponding PE is 34/28/23X, respectively.

Risk factors: New product approval progress falls short of expectations, new product promotion results fall short of expectations, and increased market competition.