The company released its 2023 annual report. For the whole year, the company achieved revenue of 1.47 billion yuan, +17.4% year on year, realized net profit of 240 million yuan, +13.4% year on year, and realized net profit of 240 million yuan without return to mother, +15.6% year on year. Looking at a single quarter, 2023Q4 achieved revenue of 360 million yuan, +47.7% year over year, and realized net profit to mother of 57.71 million yuan, or +552.3% year over year. Achieved net profit of 63.5 million yuan after deduction, +9126.5% over the same period last year.
Profit margins have remained stable, and the eye drops business is growing rapidly. The company's gross margin and net profit margin in 2023 were 77.37% and 16.36% respectively. Compared with -1.37 pct and -0.58 pct, respectively, in the same period last year, they remained stable. By product, gels/eye creams achieved revenue of 370 million yuan (+18.4%), accounting for 25.5% (+0.2pct); eye drops achieved revenue of 660 million yuan (+47.9%). We analyzed that the rapid dose of cyclosporine effectively drove growth, accounting for 45.2% (+9.3pcts); solutions achieved revenue of 50 million yuan (-8.9%), accounting for 3.5% (-1pct); medical services achieved revenue of 350 million yuan (-13.5%), accounting for 23.9% (-8.6pcts). After official approval, Ato Product-related businesses are expected to see rapid growth.
Cash dividends continue to pay back to investors, with a dividend rate of over 100%. Since its listing, the company has continuously implemented cash dividends. A total of 10 cash dividends have been distributed, amounting to 358 million yuan, so that investors can actually enjoy the company's development results and continuous returns. The company's profit distribution plan for 2023 is:
A cash dividend of 30 yuan (tax included) was distributed to all shareholders for every 10 shares, and 4 shares were transferred to all shareholders for every 10 shares, and the dividend rate reached 155.71%.
The product system is rich, and large single products have been successfully approved. As of December 31, 2023, the company has a total of 57 ophthalmic drug approval numbers. Of these, 35 products have been included in the medical insurance catalogue and 6 products have been included in the national essential drug catalogue. On March 11, 2024, the company's atropine sulphate eye drops were officially approved to slow the progression of myopia in children. This product is the first product with low myopia-related indications to be marketed domestically, and it already has good product recognition in the country. The penetration rate is expected to increase rapidly in the first year of launch. We continue to be optimistic about the company's long-term performance growth after the release of star products.
Sorting out the investment logic again: 1) The company is a leading ophthalmic drug company. Its ciclosporin eye drops are gradually being released, sales in the gel sector are picking up, and it has a good foundation for development. 2) The large single product atropine eye drops are a key drug in the field of myopia. The original internet sales base was good, and the current approval will bring great performance flexibility to the company.
Profit forecast: Based on the forecast of rapid release of atropine, we raised the company's profit forecast for 2024-2025. The company's net profit for 2024-2026 is estimated to be 487 million yuan, 755 million yuan, and 1,026 million yuan respectively, with growth rates of 102.7%, 55.2%, and 35.9% respectively. The corresponding PE is 54x, 35x, and 26x respectively. Maintain a “buy” rating.
Risk warning: promotion of core products falls short of expectations; competition in the ophthalmic drug market intensifies; new drug development risks.