2023 results are in line with market expectations
The company announced 2023 results: revenue of 204 million yuan, up 79.5% year on year; net loss to mother 133 million yuan (net loss to mother of 180 million yuan in 2022), in line with market expectations.
Development trends
Commercialization is progressing smoothly, and all three sectors have achieved growth. By sector, according to the announcement, Eagle Eye Health's revenue in 2023 was 84.6 million yuan, up 200% year on year, mainly due to the company's retinal testing business covering more hospitals and primary care institutions; Eagle Eye Health's revenue was 44.4 million yuan, an increase of 6% year over year, mainly due to the company's growth in pharmaceutical companies and overseas business; Eagle Eye Health's revenue was 75 million yuan, an increase of 72% year on year, mainly due to the company's enhanced optometry chain coverage and deepening integrated diagnosis and treatment services to further expand product services to post-examination treatment.
Product coverage and user penetration have improved rapidly. According to the announcement, the company's overall inspection volume reached 6.83 million in 2023, an increase of 58% over the previous year; the number of customers increased to 673, an increase of 70% over the previous year.
In 2023, the number of active service outlets of the company grew to 5,671, up 139% year on year. Among them, the number of active hospital outlets reached 276, up 527% year on year, the number of tests exceeded 240,000, up 198% year on year, the number of active primary medical institutions reached 1,221, up 1272% year on year, and the number of tests reached 635,000, up 640% year on year.
The product portfolio is further diversified, and overseas markets are expected to contribute additional volume. According to the announcement, in 2023, the company promoted a strategic plan integrating detection to diagnosis and treatment, expanding the product organization to include myopia prevention and control AI products and visual training AI products. Among them, the company's myopia prevention and control AI products reached 890,000 times, the number of service users reached 14,000, and the number of visual training AI products trained 920,000 times, and covered more than 800 hospitals across the country. At the same time, the company's core product, AirDoc-aifundus (1.0), also obtained CE MDR certification in 2023 and can officially begin sales in 27 EU member states. We believe that sales from overseas markets are expected to continue to increase in 2024.
Profit forecasting and valuation
We kept our profit forecast for 2024 unchanged and introduced a net profit of RMB 21.09 million for 2025. The current stock price corresponds to the 2024/2025 4.3x/2.7 times market-sales ratio. Maintaining an outperforming industry rating, considering that the company is a leader and pioneer in the AI+ medical sector, commercialization progress is expected to accelerate implementation. The valuation center of the superposition sector has recently moved upward. We raised our target price by 41% to HK$19.80, corresponding 5.2 times the 2024 market sales rate and 3.4 times the 2025 market sales rate, with 20.2% upside compared to the current market sales rate.
risks
Competition in the industry intensified, and policy tightening exceeded expectations.