Key points of investment
Incident: The company announced that in 2023, it achieved total operating revenue of 2,654 billion yuan (+24.59%, indicating year-on-year growth rate, same below), achieved net profit of 416 million yuan (+130.58%), and realized net profit after deduction of 383 million yuan (+141.52%). In the Q4 2023 quarter, the company achieved total operating income of 672 million yuan (+22.74%), achieved net profit of 89 million yuan (+377.12%), and achieved net profit of 79 million yuan (+330.78%) after deduction. The performance was in line with expectations.
Ophthalmology revenue continues to grow rapidly, and intraocular lenses are growing rapidly. In 2023, the company's ophthalmic products achieved main business revenue of 928 million yuan, an increase of 20.57% over the previous year. Among them, 1) intraocular lenses and ophthalmic viscoelastic agents benefited from the recovery of cataract surgeries, with revenue increases of 37% and 29%, respectively; the intraocular lens product line maintained a stable price system after experiencing the past two rounds of centralized procurement at the provincial level, and was fully selected in national centralized volume procurement in November 2023. The company used multi-brand full-product line advantages, channel advantages, and cost advantages to consolidate and further increase the market share of intraocular lens products; among them, sales of the high-end regional bifocal intraocular lens product SBL-3 increased year-on-year 69.37%, which strongly led to revenue growth in the intraocular lens product line. 2) Myopia prevention, control and refractive correction product line revenue increased 5.82% year-on-year. Among them, revenue from optometry materials increased by 20.17% year on year, and revenue from optometry terminal products decreased by 6.34% year on year, mainly due to the 60% share share in Hebei Xinshikang of Ion Stripping Company, which had an impact on revenue. 3) Other ophthalmology products also benefited from the steady recovery of domestic cataract surgeries, and revenue increased by 31.46% year on year.
The hyaluronic acid product line has grown rapidly, the third-generation “Sea Charm” has doubled, and the fourth generation will contribute to the growth. In 2023, the company's hyaluronic acid products achieved sales revenue of 602 million yuan, an increase of 95.54% over the previous year. The third-generation “Sea Charm” hyaluronic acid products achieved sales revenue of more than 230 million yuan, an increase of 129.32% over the previous year. The company has stabilized its leading academic position in the industry through high-end products of “Sea Charm”, enhanced customer adhesion to the Group, and promoted the overall improvement of the hyaluronic acid product portfolio. Among them, revenue from “Haiwei” and “Jiaolan” hyaluronic acid products also increased by 94.14% and 57.70%, respectively. In addition, revenue from human epidermal growth factors increased 13.58% year on year, and revenue from radio frequency and laser equipment products decreased 1.97% year over year. The company's fourth-generation organic crosslinked hyaluronic acid products have completed clinical trials in China and are expected to drive the rapid growth of hyaluronic acid after marketing.
Profit forecast and investment rating: Considering the impact of artificial crystal collection, the macro environment, and demand, we lowered the company's net profit to mother in 2024-2025 from 581/726 million yuan to 5011/632 million yuan. It is estimated to be 761 million yuan in 2026, and the PE valuation corresponding to the current market value is 35/28/23 times, respectively. Maintain a “buy” rating.
Risk warning: Risk of product development or promotion falling short of expectations, increased risk of market competition, etc.