Incident: The company released its 2023 report and 2024 quarterly report. In 2023, the company achieved total revenue of 4,013 billion yuan, an increase of 24.12% over the previous year, and realized net profit of 666 million yuan, an increase of 29.6% over the previous year. In the first quarter of 2024, the company achieved total revenue of 978 million yuan, an increase of 5.09% over the previous year, and realized net profit of 156 million yuan, an increase of 3.75% over the previous year. The performance was in line with expectations.
Comment:
The core business has maintained a relatively rapid growth rate. In 2023, the number of outpatient visits in the company exceeded 1.86 million, an increase of about 21% over the previous year; the number of surgeries exceeded 370,000, an increase of about 23% over the previous year. By business, in 2023, the company's comprehensive cataract, refractive, and optometry projects achieved revenue of 987 million yuan, 535 million yuan, 1,207 million yuan, and 1,017 billion yuan respectively, with year-on-year increases of 31.38%, 26.94%, 12.43% and 14.94%, respectively. The steady increase in the company's performance in 2023 is mainly due to adhering to the “endogenous growth+epitaxial merger and acquisition” development strategy, speeding up the improvement of the national ophthalmology service network layout, increasing business volume year by year, continuous improvement in diagnosis and treatment capacity; and continued recovery in demand for diagnosis and treatment of eye diseases such as cataracts.
Revenue in all regions of the country has achieved relatively rapid positive growth. In 2023, the company achieved revenue of 2,975 million yuan, 349 million yuan, 296 million yuan, 268 million yuan, 75 million yuan and 50 million yuan in East China, Southwest China and North China respectively, with year-on-year increases of 16.73%, 35.13%, 28.97%, 34.92%, 33.87%, 21.87% and 74.71%, respectively. The core region of East China reached 74.14% of revenue in 2023, an increase of 0.95 percentage points over the previous year.
Gross profit margins have continued to rise. In 2023, the company's gross profit margin and net profit margin increased by 0.98 percentage points and 1.17 percentage points, respectively, to 49.03% and 16.88%, respectively. By business, in 2023, the gross margins of the company's cataract and back-eye businesses increased by 5.68 percentage points and 3.6 percentage points, respectively, while the gross margins of refractive and optometry integrated projects decreased by 0.36 percentage points and 1.97 percentage points, respectively. In the first quarter of 2024, the company's gross margin increased 0.8 percentage points year over year to 48.97%, and net profit margin decreased 0.1 percentage point year over year to 16.85%. The continued rise in gross margin was mainly due to the continuous improvement in diagnosis and treatment strength and brand influence.
Investment suggestions: The company continues to advance the “endogenous growth+epitaxial merger and acquisition” development strategy, accelerate the improvement of the national ophthalmology service network layout, and continue to improve diagnosis and treatment capabilities and service levels. Future development can be expected.
The company's earnings per share for 2024-2025 are expected to be 1.07 yuan and 1.38 yuan respectively. The current share price is 24 times and 18 times PE, respectively, maintaining the company's “buy” rating.
Risk warning: risk of major medical disputes and accidents, risk of health insurance fee control, risk of market competition, risk of loss of professional medical personnel, etc.