Performance summary: The company released its 2023 annual report. In 2023, it achieved revenue of 1.74 billion yuan (+13.9%), net profit to mother of 670 million yuan (+6.9%), and approximately 570 million yuan (+2.3%) after deduction. In the fourth quarter of 2023, the company achieved revenue of 420 million yuan (+32.9%), net profit to mother of 130 million yuan (+8.4%), and approximately 100 million yuan (+5.9%) after deduction.
Revenue from framed lenses is growing rapidly, and corneal contact lenses and care products are growing steadily. The company's revenue for hard corneal contact lenses in 2023 was 820 million yuan (+7.1%), of which the industry's sales volume reached 715,000 tablets (+3.5%); revenue from nursing products was 260 million yuan (-12%); and revenue from ordinary framed mirrors and others was 350 million yuan (+70.5%). The rapid growth of framed lenses was due to the influence of new consolidated subsidiaries. 2023Q4, hard corneal contact lens revenue of 140 million yuan (+21.5%). As the company increased marketing efforts such as brand promotion, personnel training, and academic promotion, corneal contact lenses picked up in the fourth quarter; 2023Q4, revenue from nursing products was 80 million yuan (+16.5% month-on-month), and the company took measures to contain the downward trend, including online and offline collaboration, promotion activities to vigorously promote nursing products, and launch hydrogen peroxide products to contribute to performance revenue.
Expenses have increased and gross margin has declined slightly, and sales and R&D systems have been continuously improved. In 2023, the company's sales expenses ratio was 21.7%, up 2.3 pp year on year, management expenses rate 2.3%, down 1.5 pp year on year, R&D expenses rate 2.3%, up 0.1 pp year on year. Among them, the main reason for the increase in sales expenses is the increase in the expenses of sales staff and technical support personnel in various regions, as well as the fixed expenses for building new terminals; the company has increased investment in R&D and is steadily advancing products under development, such as submitting registration reports for ultra-high oxygen permeable corneal shaping lenses and scleroscopes, and initiating phase III clinical trials with low concentrations of atropine sulphate eye drops (0.01% and 0.02% concentrations). In 2023, the company's gross profit margin was 74.8%, down 2.1 pp year on year, net profit margin was 41.96%, down 3.7 pp year on year. The decline in gross margin was due to the high share of medical equipment and consumables sales revenue of the new consolidated subsidiary.
The share of optometry terminals in revenue continues to rise, and space potential remains to be tapped. As of 2023, the company's holding shares in the number of optometry service terminals added more than 90, including 79, with a cumulative total of over 400 terminals. The terminal business revenue grew rapidly. In 2023, it achieved terminal business revenue of 850 million yuan, an increase of 17.2% over the previous year. Of these, 2023Q4 achieved terminal business revenue of 210 million yuan, an increase of 34.6% year on year, exceeding the total revenue growth rate. The company will continue to expand the scale of optometry terminals to obtain product and service revenue to guarantee the company's performance Steady growth.
Profit forecast and investment advice: The company's 2024-2026 EPS is expected to be 0.91 yuan, 1.06 yuan, and 1.23 yuan, respectively, maintaining a “holding” rating.
Risk warning: policy risk; risk of product development falling short of expectations; optometry center expansion falling short of expected risk.