Incidents:

Aibo Healthcare released its 2023 Annual Report and 2024 Quarterly Report on April 17:

In 2023, the company achieved revenue of 950 million yuan (+64%, year-on-year caliber, same below), net profit to mother of 304 million yuan (+31%), and net profit after deducting non-return to mother of 289 million yuan (+39%).

In the first quarter of 2024, the company achieved revenue of 310 million yuan (+64%), net profit attributable to mother of 103 million yuan (+31%), and net profit without return to mother of 99 million yuan (+32%).

Investment highlights:

The surgical treatment and myopia prevention and control business continued to grow, and the vision care business expanded rapidly. In 2023, the company's intraocular lens business revenue was 500 million yuan (+42%), gross profit margin 89.23% (-0.31pct); revenue from other surgical products was 121 million yuan (+36%), gross profit margin 40.52% (-2.06pct); revenue from corneal reshaping lenses was 219 million yuan (+26%), gross profit margin 85.13% (-1.11pct); revenue from other myopia prevention and control products was 57 million yuan (+166%), gross profit margin 68.77% (-3.62pct); contact lens revenue 1.37 100 million yuan (+1505%), gross profit margin 26.63% (+40.52pct); other eyesight care business revenue of 013 million yuan (+238%), gross profit margin 25.10% (-22.75pct). In the first quarter of 2024, the company's surgical treatment and myopia prevention and control business continued to grow; the vision care business was in the early stages of expansion and grew rapidly.

A rich pipeline of ongoing research gives the company a high level of continuous growth. In 2023, the company invested 133 million yuan (+61%) in R&D, accounting for 13.91% (-0.25pct) of revenue.

The company's lens eye intraocular lens (PR) has been registered, and clinical progress is going well; self-developed silicon hydrogel contact lenses are in the late stages of clinical trials; three medical tissue fillers, as well as uterine repair patches and digestive mucosa repair patches, have entered clinical trials, marking a further diversification of product categories.

Profit forecast and investment rating: In view of the rapid development of the company's vision care business, we have adjusted the profit forecast. The company's revenue for 2024-2026 is estimated to be 1,401 billion yuan, 1,827 million yuan, and 2,356 million yuan, respectively, up 47%, 30%, and 29% year-on-year; net profit to mother is 410 million yuan, 552 million yuan, and 736 million yuan, respectively, up 35%, and 33% year-on-year; PE is 35 times, 26 times, and 19 times, respectively. The company is a leading enterprise in the field of ophthalmic medical devices and vision care with strong domestic innovative R&D and commercialization capabilities, expanding its product portfolio in many cutting-edge directions. Maintain a “buy” rating.

Risk warning: the risk of collecting artificial lenses; the risk that the profits of the contact lens business fall short of expectations; the risk of deteriorating supply and demand in the myopia prevention and control business industry; the risk that R&D progress falls short of expectations; the risk that international expansion falls short of expectations.