Event: The company released its 2024 three-quarter report. In the first three quarters of 2024, the company achieved revenue of 2.14 billion yuan (-1.4%); net profit attributable to mother 0.02 billion yuan (-95.0%); net profit not attributable to mother of 0.02 billion yuan (-92.0%).

2024Q3 achieved revenue of 0.72 billion yuan (-9.1%); net profit attributable to mother of -0.03 billion yuan (-133.3%); net profit without deduction of 0.03 billion yuan (-133.2%).

Investment and mergers and acquisitions have accelerated, and the company's profit side is under pressure in the short term. The gross margin for the first three quarters of 2024 was 39.5%, down 6.1pp year on year; net margin was 0.7%, down 13.9pp year on year. The company's profit side is under pressure in the short term, mainly due to a slight decline in revenue and an increase in amortization expenses for newly opened hospitals in recent years, which has had a big impact on the profit side.

4. There has been a slight increase in the rate. In terms of expenses, the company's sales rate for the first three quarters of 2024 was 17.8%, up 1.8 pp year on year; management rate was 14.7%, up 2.5 pp year on year; R&D rate was 0.2%, down 0.1 pp year on year; and financial rate was 2.9%, up 0.8 pp year on year. The four rates for the first three quarters of 2024 totaled 35.6%, an increase of 5pp over the previous year.

Epitaxial expansion will bring long-term performance growth to the company. In 2023, the company acquired Dongguan Guangming Ophthalmology Hospital through share transfer. In 2024, the company continued to increase its integration efforts to stimulate Dongguan Guangming to accelerate development through measures such as restructuring the marketing department of Dongguan Guangming Ophthalmology Hospital and providing supply chain support. Epitaxial expansion generates certain amortization costs in the short term, and will be a continuous driving force for the company's performance growth in the medium to long term.

Profit forecast: The estimated revenue for 2024-2026 is 2.8 billion yuan, 3.2 billion yuan, and 3.5 billion yuan, respectively.

Risk warning: Industry policy risks, market competition exacerbates risks, and new stores fall short of expectations.