Core views:
The company publishes its 2023 annual report and 2024 quarterly report. In '23, the company achieved revenue of 749 million yuan, +20.2% year-on-year; net profit to mother was 158 million yuan, +15.7% year-on-year. Among them, Q4 in '23 and Q1 '24 achieved revenue of $186/192 million respectively, +10.4%/+11.9% YoY, and net profit to mother of 35.12 million yuan/42.21 million yuan, or -28.3%/+20.4% YoY.
The “Easy Control” series of products maintained high growth. Although the industry as a whole was under slight pressure in '23, the company's various businesses still achieved impressive growth. Among them, by product, the company's lens/raw material sales/glasses/frame business achieved sales revenue of 5.95/0.90/0.54/0.05 billion yuan respectively, +24.59%/+1.42%/+10.44%/+50.09% compared with the same period last year, and the three star products have reached 52.31% of conventional lens revenue, and the product structure continues to be optimized. The “Easy Control” series of large single products achieved revenue of 133 million yuan for the full year of '23, +70% compared to the same period last year. Furthermore, according to the company's quarterly report for '24, “Light
The “loose control” product achieved revenue of 41.08 million yuan in 24Q1, +50% over the same period last year, and maintained a high increase.
Smooth expansion of new channels and new customers. According to the company's annual report for the year 23, the company has accelerated the expansion of medical channels and has reached cooperation with well-known medical institutions such as Aier Ophthalmology, Zhongshan Ophthalmology, and Zhejiang University Ophthalmology Hospital, which is expected to help the company take the development of medical channels to the next level in the future. Furthermore, the company reached an exclusive cooperation with Leica in Germany to further communicate on technology research and development, marketing, optical design, etc., which is expected to help the company launch new products and continue to optimize the structure.
Profit forecast and investment advice: The company is a leading domestic lens manufacturer and is committed to building the “No. 1 lens brand in China”. The company continues to make efforts in retail channels and medical channels through a professional brand image, continuous accumulation of technical advantages and strong channel coverage capabilities, and is expected to continue to widen the gap with small enterprises and seize share. EPS is expected to be 0.96/1.18/1.44 yuan/share in 24-26. Refer to the industry and historical valuation center to give the company a reasonable valuation of 30xPE in 24, corresponding to a reasonable value of 28.88 yuan/share, maintaining a “buy” rating.
Risk warning: Domestic macroeconomic downturn risk, risk of product demand falling short of expectations, risk of large fluctuations in raw material prices, etc.