Opcom released its 23rd annual report: Opcom released its 23rd annual report: In '23, the company achieved operating income of 1,737 million yuan/year over year, achieved net profit of 667 million yuan/year on year +6.85%, and achieved net profit deduction of 572 million yuan/year on year +2.27%. 23Q4 operating income of 418 million yuan/year on year +32.92%, net profit to mother of 129 million yuan/year on year +8.49%, net profit after deduction of 101 million yuan/year on year +5.86%, in line with expectations;
1) With the weakening of consumer power in the second half of '23, the launch of competitive products such as defocus lenses, and the rapid increase in the number of angle plastic brands, the growth rate of hard mirror revenue declined: in 2023, hard mirror achieved revenue of 817 million yuan/year over year, with a gross profit margin of 89.2% /year over year -0.42pct, of which 23Q4 hard lens corneal contact lenses achieved revenue of 141 million yuan/year over year +21.54 percent. We believe that the month-on-month increase in growth was mainly due to the lower 22-year base.
2) The competitive pattern of nursing products intensified, and the diversion of e-commerce platforms led to a decline in revenue: in 2023, nursing products achieved revenue of 262 million yuan/-12.02% year over year, private brand promotion continued to gain strength, and nursing products achieved a gross profit margin of 57.33% /year over year +1.85pct, of which 23Q4 achieved revenue of 76 million yuan/year over year.
3) Ordinary frame mirrors and others: Achieved revenue of 345 million yuan/year over year +70.47% in 2023, of which 23Q4 revenue was 108 million yuan/year over year +120.37%, mainly from sales revenue of medical equipment and consumables from new subsidiary companies. The reduction in sales of non-hard lens products such as off-focus frame lenses also contributed. The gross profit margin for 23 years was 56.74% /year over year -10.4 pct, mainly due to the drag of equipment and consumables, which was basically the same as in '22 after exclusion.
4) Steady growth of participating terminals: In 2023, the company's medical services achieved revenue of 302 million yuan/year over year, gross profit margin of 71.32% /year over year -0.13pct, 23Q4 achieved revenue of 87 million yuan/year on year +41.25%, and the number of participating terminals increased by more than 90, with a cumulative total of more than 400.
By channel, in 2023, the company's distribution business achieved revenue of 644 million yuan/year over year, direct sales revenue of non-controlled terminals of 245 million yuan/-4.69% year over year, and terminal business revenue of 848 million yuan/year on year +17.22%. Among them, Q4's distribution business achieved revenue of 158 million yuan/YoY +36.90%, direct sales revenue of 46 million yuan/YoY +14.61%, and terminal business revenue of 214 million yuan/YoY +34.62%.
In terms of profitability: 23-year gross profit margin of 74.78% /-2.11pct, mainly due to sales of medical equipment and consumables by consolidated subsidiaries, sales rate 21.7% /+2.33pct, mainly due to increased local sales and consolidated terminals, management rate 6.79%/-1.49pct, financial rate -0.07% /+0.39pct, net profit margin 41.96% /-3.71 pct.
Investment advice: As a leading enterprise deeply involved in the optometry industry, the company continues to introduce new products for myopia prevention and control. We believe that in the future, the company's growth direction will be more diversified and its ability to withstand risks will be stronger. The company has now actively carried out structural adjustments and is expected to return to the growth channel under new industry trends. We expect the company's net profit to be 737/8.19/915 million yuan respectively in 2024-2026, corresponding to the closing price of PE on March 29, 22.13/19.94/17.83 times, respectively, maintaining a “buy” rating.
Risk warning: weak spending power, increased competition, new business development falls short of expectations, etc.