Incidents:
On April 25, Aier Ophthalmology released its 2023 Annual Report and 2024 Quarterly Report:
In 2023, the company achieved revenue of 20.4 billion yuan (+26%, year-on-year caliber, same below), net profit to mother of 3.359 billion yuan (+33%), and net profit of 3,514 billion yuan (+20%) after deducting non-return to mother.
In the first quarter of 2024, the company achieved revenue of 5.2 billion yuan (+3.50%), net profit attributable to mother of 899 million yuan (+15%), and net profit of non-return to mother of 843 million yuan (+12%).
Investment highlights:
Not afraid of external environmental challenges, leading ophthalmology companies operate steadily. In 2023, the number of outpatient visits and surgeries reached a new high. The number of outpatient visits was 15.11 million (+34%), 1.18 million surgeries (+36%), provided eye health documentation services for 40.51 million patients, built 135 myopia prevention and control bases, and established more than 27 million eyesight files for students.
2023 performance split: refractive project revenue of 7.4 billion yuan (+17%), gross profit margin of 57.40% (+0.58pct); optometry service project revenue of 5 billion yuan (+31%), gross profit margin of 57.05% (+0.61 pct); cataract project revenue of 3.3 billion yuan (+55%), gross profit margin 37.97% (+2.63pct); immediate project revenue of 1.8 billion yuan (+34%), gross profit margin of 45.68% (+1.22pct); back section project revenue of 14 billion yuan (+31%) interest rate 34.67% (+1.06pct); revenue from other projects was 1.4 billion yuan (+0.17%), gross profit margin 46.06% (-0.29pct). In the face of a changing external economic environment, the company continued to achieve steady growth in performance in 2023 and the first quarter of 2024.
Pay attention to shareholder returns and increase the dividend ratio. From 2021 to 2023, the company's annual dividend per share was 0.12 yuan/0.10 yuan/0.15 yuan, cash dividends of 649 million/718 million/1,395 million yuan, and share payout ratios were 28%, 28%, and 42%, respectively.
Actively participate in public welfare and assume social responsibility. The company is an ophthalmology medical group with leading global scale and diagnostic capabilities. By the end of 2023, there were 881 Aier Ophthalmic brand hospitals, ophthalmology centers and clinics worldwide. Among them, there are 750 in mainland China (including 439 listed companies and 311 M&A funds), 8 in Hong Kong, China, 1 in the US, 108 in Europe, and 14 in Southeast Asia. In 2023, the company donated 386 million yuan to support more than 700 public welfare projects.
Taking the “Fraternity · Walk of Light” project as an example, it has rescued more than 1,000 patients with the six types of eye diseases of cataracts, pyrium, fundus disease, strabismus, and amblyopia. It is planned to invest 100 million yuan in public welfare funds over 5 years to carry out support actions such as free diagnosis and screening, popular science education, eye disease assistance, and ophthalmology diagnosis and treatment ability training for primary doctors to comprehensively and systematically promote the improvement of people's eye health standards, and form a strong strategy for rural revitalization and cooperation power.
Profit forecast and investment rating: Considering the impact of macroeconomics and consumption on the industry, we have adjusted the profit forecast. The company's revenue for 2024-2026 is 23.4 billion yuan, 27.2 billion yuan, and 31.9 billion yuan, respectively, up 15%, 16%, and 17% year on year; net profit to mother is 4 billion yuan, 4.9 billion yuan, and 6 billion yuan, respectively, up 19%, 22%, and 23% year on year; PE is 31 times, 25 times, and 20 times, respectively. The company is a leading ophthalmology chain leader. Continuously deepening medical teaching and research capabilities and network layout at home and abroad form a long-term moat and maintain a “buy” rating.
Risk warning: risk of impairment of goodwill; risk of consumer consumption affecting businesses such as refractive vision beyond expectations; increased risk of industry competition; risk of medical accidents; risk of new products and technology promotion falling short of expectations.