Incidents:
On April 17, the company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 951 million yuan, a year-on-year increase of 64.14%, and net profit to mother of 304 million yuan, an increase of 30.63% over the previous year, after deducting non-return net profit of 289 million yuan, an increase of 38.96% over the previous year. The fourth quarter achieved revenue of 283 million yuan in a single quarter, up 104.86% year on year, net profit to mother of 52.1 million, an increase of 48.55%, and net profit after deducting non-return to mother of 49.91 million yuan, an increase of 89.92% year on year. In the first quarter of 2024, the company's revenue was 310 million yuan, up 63.55% year on year, and net profit to mother was 103 million yuan, up 31.26% year on year.
Comment:
Sales of intraocular lenses exceeded one million tablets, and OK Mirror's sales increased steadily in 2023, the company's intraocular lens revenue was 500 million yuan (+41.67%). Among them, overseas intraocular lens revenue increased 127.90% year on year. Domestic sales have exceeded one million pieces per year, and the international market is also advancing at an accelerated pace. Revenue from corneal reshaping lenses was 219 million yuan (+26.03%); revenue from other myopia prevention and control products was 57.3566 million yuan (+166.12%). Revenue from “Puno Hitomi” and “Shinno Hitomi” defocus lenses increased 247.32% year over year.
The corneal reshaping lens business is affected by factors such as downgrading consumption and increased competition, and the market growth rate has slowed down. However, this product is still one of the most effective myopia prevention and control products for young people at this stage, and has achieved higher growth than the industry average. Contact lens revenue was 137 million yuan. Revenue from other eyesight care products was 129.564 million yuan. The company has been working in the field of contact lenses for many years. Through mergers and acquisitions of Tianyan Pharmaceutical, Fujian Youyou Kang, and Meiyuetong, the contact lens market, the color film production line is currently in full production, and continues to improve production line efficiency by relying on the company's R&D advantages.
The company's expense ratio for the 2023 period was 41.53%, of which the sales expense ratio was 19.28% and the management expense ratio was 12.09%, which was basically the same as the previous year. The R&D expenses rate was 9.85%, down 1.53 percentage points from the previous year. Net cash flow from operating activities fell 15% year on year, mainly because the company increased raw material reserves to cope with the increase in production capacity of the original core business, the commissioning of the Yantai production base, and the expansion of the contact lens business.
Rich R&D pipeline to support the long-term development of the company
In 2023, the company's pre-assembled aspherical intraocular lenses, aspherical intraocular lenses, physiological seawater nasal sprayers and other products were approved for sale, and hard contact lens lubricants were officially launched for sale. Lenticular eye intraocular lenses (PR) have been registered, and clinical projects such as aspheric trifocal astigmatism correction intraocular lenses and aspherical extended depth of field (eDOF) intraocular lenses are progressing rapidly and progressing well.
Profit forecast: We expect the company's revenue for 2024-2026 to be RMB 1,354/18.51.380 million yuan (value before 2024/2025 was RMB 1,178/1,601 billion yuan, respectively). The reason for the increase was due to the accelerated growth of the beauty pupil business, and net profit to the mother was RMB 4.04/5.23/ 662 million yuan respectively (the value before 2024/2025 was RMB 48/618 million, respectively). The reason for the reduction was that the company increased its investment in marketing and promotion expenses to maintain a “buy” rating.
Risk warning: There is a risk that product development progress falls short of expectations, sales promotion falls short of expectations, and core products do not win bids in volume procurement.