Events:

On August 29th, 2023, Puri Ophthalmology released its 2023 semi-annual report. The company realized revenue of 1.378 billion yuan (+ 54.88%), net profit of 235 million yuan (+ 358%), and net profit of 149 million yuan (+ 205%), of which 23Q2 realized revenue of 728 million yuan (+ 72.85%), net profit of 72 million yuan (+ 420%) and net profit of 77 million yuan (+ 563%).

Comments:

The scale effect is reflected rapidly, and the expense rate enters the decline range during the period. The ① sales expense rate 23H1 is 15.77% (- 2.20pct), and the ② management expense rate 23H1 is 11.89% (- 2.49pct). The post-epidemic sales promotion campaign is back on track, and the absolute value of sales expenses is slightly higher than that of management expenses compared with the same period last year, but they still obviously reflect the scale effect of rapid revenue growth. The ③ financial expense rate of 2.07% (- 1.28pct) is mainly due to the increase in interest income offset by the increase in interest expenditure, and the ④ R & D expense rate of 0.35% (+ 0.07pct).

Overall, the 23H1 gross profit margin is 45.38% (+ 1.50pct), the period expense rate is 30.09% (- 5.91%), the net interest rate is 17.44% (+ 11.68%), and it is worth noting that the effective tax rate is 17.92% (- 16.58pct). The improvement of scale effect on the period expense rate and the decline of the effective tax rate are the core factors for the faster-than-expected increase in the net interest rate.

The basic ophthalmopathy business rebounded strongly, profitability improved significantly, and the overall gross profit margin remained good. ① refractive business revenue 709 million yuan (+ 33.37%), accounting for 51.49% (- 8.30pct), gross profit margin 53.00% (+ 0.69pct), continue to pay attention to the consumer environment and refractive market competition pattern change ② cataract business revenue 275 million yuan (+ 137%), accounting for 19.94% (+ 6.91pct), gross profit margin 43.37% (+ 8.06pct), the company paid more attention to cataract business this year, superimposed the rebound logic of stock patients after the epidemic, 23H1 revenue scale, revenue share and gross profit margin increased significantly, we believe that cataract business is expected to usher in the industry's second growth curve. ③ comprehensive ophthalmopathy business revenue 197 million yuan (+ 70.71%), accounting for 14.30% (+ 1.33pct), gross profit margin 19.77% (+ 4.60pct); ④ optometry business revenue 191 million yuan (+ 52.87%), accounting for 13.87% (- 0.18pct), gross profit margin 45.67% (+ 2.91pct), the company continues to explore digital fitting corner overtaking opportunities, growth is worth looking forward to.

"National chaining + city integration", the layout strategy has been steadily advanced. During the reporting period, the company completed the amalgamation of Dongguan **** Eye Hospital, Hubei Puri Hospital and Shanghai Fengxian Puri Hospital successively opened to contribute revenue, as of 23H1 company has opened 27 hospitals and 3 outpatient departments; in addition, the company has new hospitals in Guangzhou, Shenzhen No.1 / No.2 Hospital, Hashi No.2 Hospital and other new hospital construction, 23Q4 is expected to start opening one after another.

Profit forecast and investment advice: the company adheres to the "national chain + city integration", focusing on the layout of high-quality eye hospitals in the central city, middle and high-end customer drainage and high-end business development is expected to achieve "volume and price rise". Considering that the revenue growth of the company is better than that of the same industry and the profitability is significantly enhanced, we estimate that the company's revenue in 2023-2025 will be 25.86max 3.27010 million yuan (the original value is 24.76pm 31.40max 39.04), and the homing net profit will be 2.70max 2.73pm 367 million yuan (the original value is 1.49max 1.96max 2.55), corresponding to the 2023-2025 PE is 59X/58X/43X. We give the company a "buy" rating.

Risk hint: policy risk, hospital expansion is less than expected risk, industry competition aggravates risk.