Brief performance review
On April 17, 2024, the company released its 2023 annual report. In 2023, the company achieved revenue of 951 million yuan (+64% year over year); realized net profit attributable to mother of 304 million yuan (+31% year over year); realized net profit without deduction to mother of 289 million yuan (+39%).
In 2023, Q4 achieved revenue of 283 million yuan (+105% year over year), net profit attributable to mother of 52 million yuan (+49% year over year), and net profit after deducting non-return to mother of 50 million yuan (+90% year over year).
The company also released its 2024 quarterly report. 2024Q1 achieved revenue of 310 million yuan (+64% year over year); realized net profit attributable to mother of 103 million yuan (+31% year over year); realized net profit without deduction of 99 million yuan (+32% year over year).
Management analysis
Artificial crystals are expected to be further released through collection. In 2023, the company's intraocular lens revenue was 500 million yuan (+42% year-on-year), of which overseas intraocular lens revenue increased 128% year on year. According to the company's announcement, the company won bids for all three types of artificial crystal products in the fourth batch of domestic consumables in '23, with an annual purchase volume of over 280,000 units. The company's high-end crystals are expected to be rapidly released through collection, and it is expected to further increase its market share with its product advantages.
The vision care business is expanding at an accelerated pace. In 2023, the company's contact lens revenue was 137 million yuan (+1505% YoY). The company increased production capacity through mergers and acquisitions of Tianyan Pharmaceutical, Fujian Youyoukang, and Meiyuetong. By the end of '23, the company's color film production line was in full production. It is expected that the future will mutually empower the company with the target of the acquisition, which is expected to accelerate the company's contact lens business layout.
The competitiveness of corneal reshaping lenses has been strengthened in the field of myopia prevention and control. In 2023, the company's corneal reshaping lens revenue was 220 million yuan (+26% year over year), and “Puno pupil” and “Xinnuoti” defocus lens revenue increased 247.32% year over year. We believe that the rapid increase in revenue for myopia prevention and control series products is mainly due to 1) Product expansion: In '24, the company launched the Pro series corneal shaping lenses, and the launch of new products to better meet high-end demand. 2) Expansion of indications: According to the company's official website, the expansion of the scope of application of the company's Puno pupil corneal contouring mirror in 2022 was approved by the State Drug Administration. The company is expected to further increase its market share with product advantages.
Profit Forecasts, Valuations, and Ratings
The company's core products continue to be released, and the product structure has changed. We are optimistic about the company's future development prospects. Based on the current development situation, we lowered our 24-25 profit forecast. The original forecast value of net profit for 24-25 was 4.40/587 million yuan, and the net profit for 2024-2026 is 3.93/4.99/626 million yuan, respectively, up 29%/27%/26% year on year, and EPS is 3.74/4.74/5.95 yuan respectively. The current price is 34/26/21 times PE, respectively. Maintain an “Overweight” rating.
Risk warning
Market promotion falls short of expectations; product development progress falls short of expected risk; risk of mergers and acquisitions falling short of expectations; risk of shareholder holdings reduction.