The company is a leader in the biomaterials segment, opening up a development ceiling for incremental ophthalmology and medical and aesthetic business layouts. Established in 2007, Haohai Biotech is mainly engaged in R&D, production and sales of medical device products. The company quickly entered the medical biomaterials market with a “self-development+acquisition” strategy. The company's main business covers four major categories: ophthalmology, medical aesthetics and wound care, orthopedics, anti-adhesion and hemostasis. Among them, the ophthalmology (covering intraocular lenses, OK lenses, PRL, etc.) and medical and aesthetic businesses (mainly including hyaluronic acid, botulinum toxin, and optoelectronic products), which have been actively deployed in recent years, have continued to grow rapidly, opening up the second curve of the company's development.
Driven by internal and external factors, the ophthalmology and aesthetic markets continue to grow rapidly, and iterations of innovative products drive the continuous growth of the industry. Benefiting from the low market penetration rate, the ophthalmic device treatment market, represented by cataract surgery and refractive correction, has broad prospects. In 2019, the number of patients with cataract and myopia (under 20) was 180 million and 170 million, respectively. Furthermore, the penetration rate of cataract surgery in China was only 1/3 of developed countries. The penetration rate of corneal shaping lenses is less than 2%. The increase in penetration rate is expected to release huge market demand in the context of increased health awareness. China's medical and aesthetic market is booming, with a market size of 189.1 billion yuan in 2021. It is expected to continue to develop at a rapid pace in the future, growing at a compound growth rate of 14% to 638.1 billion yuan in 2030. In recent years, new products represented by multifunctional crystals, next-generation hyaluronic acid products, and medical and aesthetic optoelectronics have been iterated. Demand-side prosperity and supply-side iteration have driven the ophthalmology and medical and aesthetic industries to continue to grow rapidly.
The company's business layout is comprehensive, and the ophthalmology and aesthetic business is highly competitive. 1) Ophthalmology business: The company has achieved a full link layout from ophthalmic materials to products. The company is a leading manufacturer in the middle and low end intraocular lens market. It has achieved full coverage of high- and low-end products of corneal plastic lenses through its own+agent brand model, benefiting from industry recovery since 2023 in the short term. In the medium to long term, with the launch of the company's multi-functional high-end intraocular lenses and second-generation PRL products, the ophthalmology business will further enrich, improve and expand the incremental market; 2) Medical and aesthetic business: the third-generation “Sea Magic” products are launched domestically, and the new generation of hyaluronic acid products is expected to grow rapidly. Acid products, the company bought European and American Kanghua and entered Medical and aesthetic optoelectronics business, investment and layout of the botulinum toxin business. In addition, the company's fourth-generation organic crosslinked hyaluronic acid products have entered the clinical stage, and the continuous launch of new products injects medium- to long-term growth momentum into the medical and aesthetic business; 3) Orthopedic and anti-adhesion business: The company is a leading company in related markets, and its business development is stable.
Investment proposal: The company is a consumer+medical device platform company with strong R&D and business management layout capabilities and market influence within the segmented circuit. The products cover various fields such as ophthalmology, medical aesthetics, orthopedics, and anti-adhesion products. The business has entered a rapid growth channel, and the orthopedic and anti-adhesion business is developing steadily. We predict that the company's revenue for 2024-2026 is 3.26/ 39.9/4.81 billion yuan, corresponding to YoY; corresponding to YoY's net profit of $53/67/8.2 million, corresponding to YoY YoY is 28%/25%/23%; the corresponding 2024-2026 PE multiples are 29/23/19, respectively. Covered for the first time, giving a “Recommended” rating.
Risk warning: 1) the risk of increased competition in the industry; 2) the risk that the marketing model cannot adapt to market changes; 3) the risk that new product development falls short of expectations; 4) the risk of mergers and acquisitions integration falling short of expectations; 5) the uncertainty of collection policies.