Key points of investment
Incident: 2024H1 revenue of 0.883 billion yuan (YoY +13.21%, same below), net profit of 0.324 billion yuan (+4.42%), net profit not attributable to mother of 0.283 billion yuan (+6.72%); single Q2 revenue of 0.419 billion yuan (+10.56%), net profit due to mother of 0.131 billion yuan (-4.37%), net profit of non-attributable net profit of 0.116 billion yuan (+0.45%), performance Meets expectations.
OK Mirror was affected by continued weakness in high-end consumption, which declined slightly in the first half of the year: by product in the first half of 2024, 1. OK Mirror's revenue was 0.373 billion yuan (-3%), with a gross profit margin of 88.32% (-1.13pct), mainly affected by continued weakness in high-end consumption; nursing products were 0.118 billion yuan (-4%), the share of self-produced nursing products increased significantly, gross margin increased significantly, gross profit margin 60.65% (+6.65pct); medical service revenue 0.191 billion yuan (+46%) The increase was mainly due to additional hospital revenue, but due to the lower gross margin of hospitals, the overall gross profit margin was 64.97% (-8.81pct); framed mirrors and others were 0.161 billion yuan (+44.28%). Other businesses indicated technical services for non-medical institutions. The addition of new products contributed to performance, with a gross profit margin of 70.45% (+3.38pct).
Sales have increased in all regions of the country, and there has been an increase in participating optometry centers: the Northeast region, East China region, and North China region saw a year-on-year increase of more than 10% in revenue in the first half of 2024, all mainly from contributions from medical institutions. As of the first half of 2024, the company has established partnerships with more than 2,000 terminals. It also owns and shares in more than 470 optometry service terminals.
The research pipeline is well-stocked and progressing normally: the company's self-developed and self-produced lens replacement materials (first generation) have further expanded production, and the proportion of use has gradually increased. Ultra high oxygen permeable corneal shaping lenses and sclera lenses made from second-generation materials have all been registered and accepted, and lenses made from third-generation materials have entered the registration and inspection stage. Multifocal soft contact lenses have entered the multi-center clinical trial stage; many new products have been launched for nursing products, and various specifications have been added to nursing products that have already been marketed to meet the separate needs of offline and online. Hydrogen peroxide disinfectant (anti-brand) has been mass-produced and marketed, achieved breakthroughs in key technologies in platinum ring development, and completed in-house production workshop construction. Pre-pilot research on eye drop products has been completed; hard contact lens test strips have obtained registration inspection reports and are in the registration preparation stage; low concentration atropine sulfate eye drops (0.01% and 0.02% concentrations) from the holding subsidiary Anhui Oupu Shifang Pharmaceutical Technology Co., Ltd. are still in the phase III clinical trial.
Profit forecast and investment rating: Considering the impact of the macro environment on sales of the company's core products, we adjusted net profit to mother for 2024-2026 from 0.769/0.881/1.015 billion yuan to 0.703/0.811/0.943 billion yuan. The PE valuation corresponding to the current market value is 20/18/15 times, respectively. Considering the company's rich product reserves, it maintains an “gain” rating.
Risk warning: Risk of product release falling short of expectations, policy risk, increased risk of market competition, etc.