The company released its 2023 annual report, and the profit side grew rapidly. In 2023, the company achieved operating income of 2,654 million yuan (yoy +24.59%), net profit of 416 million yuan (yoy +130.58%), and net profit of 383 million yuan after deducting non-return to mother (yoy +141.52%). In Q4, Q4 achieved operating income of 672 million yuan (yoy +22.74%), net profit of 89 million yuan (yoy +377.12%), and net profit after deducting non-return to mother of 79 million yuan (yoy +330.78%). The profit side achieved rapid growth, in line with market expectations.
The ophthalmology business is growing steadily and progressing steadily in the research pipeline. In 2023, ophthalmic products achieved revenue of 928 million yuan (yoy +20.57%). (1) Revenue from the cataract product line increased 35.07% year on year, with intraocular lens revenue increasing 37% year on year, mainly due to the significant increase in sales volume of Henan Cosmos and New Industry Agent; (2) Optometry product line revenue increased 5.82% year on year, with optometry terminal product revenue falling 6.34%, mainly due to the sale of 60% of Hebei Xinshikang's revenue; revenue from optometry materials increased 20.17% year on year. In addition, the company's many ophthalmology research projects are progressing steadily, and it is expected to provide a new growth driver for ophthalmology after the product is launched.
The medical and aesthetic business is growing rapidly, and hyaluronic acid products are performing well. In 2023, medical and aesthetic products achieved revenue of 1,057 billion yuan (yoy +41.27%). (1) Hyaluronic acid products achieved revenue of 602 million yuan (yoy +95.54%). Haimei, Haiwei, and Jiaolan respectively increased 129%, 96%, and 58% year-on-year, of which Haimei's 23 annual revenue exceeded 230 million yuan, driving rapid growth in medical and aesthetic business revenue and gross profit; (2) human epidermal growth factor achieved revenue of 172 million yuan (yoy +13.58%); (3) RF and laser equipment achieved revenue of 284 million yuan (yoy -1.97%).
Profit forecasting and investment advice. The company's 24-26 EPS is estimated to be 3.25/4.42/5.29 yuan/share, respectively, corresponding to PE33.72/24.84/20.73x. We maintain the view that A shares have a reasonable value of $119.5/share and that H shares have a reasonable value of HK$54.1 per share, and maintain a “buy” rating.
Risk warning. Policy risks such as mining; risk of increased competition; progress in R&D falling short of expectations.