Introduction to this report:
The performance is in line with expectations. Through active marketing measures, OK Mirror's growth rate recovered relatively well in Q4; subsequent investments in medical equipment, optometry terminals, and various technologies are expected to help long-term development in the future.
Key points of investment:
Maintain a prudent accumulation rating. Considering the intensification of competition between OK mirrors and nursing products, the 2024-2025 EPS was lowered to 0.86/0.99 yuan (originally 0.91/1.08 yuan), the 2025 EPS was added by 1.14 yuan, the 2024 PE 24X was given, and the target price was lowered to 20.64 yuan, maintaining the prudent increase rating.
The performance was in line with expectations. In 2023, the company achieved revenue of 1,737 billion yuan (+13.89%), net profit of 667 million yuan (+6.85%), net profit of non-return to mother of 572 million yuan (+2.27%); of these, 2023Q4 achieved revenue of 421 million yuan (+33.84%), net profit to mother of 119 million yuan (+8.49%), and net profit of non-return to mother of 101 million yuan (+5.85%), which is in line with expectations.
OK Mirror's growth rate has recovered, and the company has taken active marketing measures. OK Mirror's revenue in 2023 was 817 million yuan (+7.06%), and the growth rate of Q1-3 square plastic slowed due to various factors such as increasing competition. The company adopted active marketing measures, including introducing package plans, specialty lenses, increasing sales and technical personnel residing outside the province, shortening the delivery cycle, etc., which combined with full verification of the efficacy of OK Mirror in clinical and real world conditions. Q4 achieved a good increase, and is expected to maintain steady growth in the future.
Medical devices and optometry terminals provide new growth points. Ordinary frame mirrors and others achieved revenue of $345 million (+70.47%) in 2023, mainly due to the medical equipment and consumables revenue of the new merger subsidiary. The development trend of optometry terminals is good. The medical service business achieved revenue of 302 million yuan (+19.48%), and the participating optometry terminals added more than 90 to 400, which is expected to maintain a relatively rapid growth rate, and profits are expected to be gradually released after climbing the slope. Nursing products achieved revenue of 263 million yuan (-12.01%). By promoting self-produced nursing product control terminals and increasing e-commerce operations, it is expected to rise steadily in the future. The company actively invests in various technologies to help long-term development in the future.
Risk warning: competition increases risk, commercialization of new products falls short of expectations, etc.