Matters:
The company released its 2023 annual report: in 2023, the company achieved revenue of 20.367 billion yuan (+26.43%); net profit attributable to shareholders of listed companies of 3.359 billion yuan (+33.07%); deducted non-net profit of 3,514 billion yuan (+20.39%).
In the fourth quarter, the company achieved revenue of 4.320 billion yuan (+41.25%); net profit attributable to shareholders of listed companies of 180 million yuan (+6.25%); and deducted non-net profit of 409 million yuan (-1.57%).
The company released its 2024 quarterly report: achieved revenue of 5.196 billion yuan (+3.50%); net profit attributable to shareholders of listed companies of 899 million yuan (+15.16%); deducted non-net profit of 843 million yuan (+12.04%).
The company's distribution plan is to distribute a cash dividend of 1.5 yuan (tax included) to all shareholders for every 10 shares based on 9.299 billion shares.
Ping An's point of view:
The number of outpatients and surgeries in the company grew rapidly: in 2023, the number of outpatient visits exceeded 15 million, an increase of 34.26% year on year; the number of surgeries exceeded 1.1 million, an increase of 35.95% year on year. The increase in the number of outpatient clinics and surgeries in the company is the main driving force behind the high growth rate of the company's performance. By disease type, the company's cataract business achieved revenue of 3.327 billion yuan, an increase of 55.24% over the previous year. The company's cataract sector achieved rapid growth, mainly due to the low base in 2022 due to the impact of the external environment, compounded by 23 years of demand recovery. The company's refractive business achieved revenue of 7.431 billion yuan, an increase of 17.27% over the previous year.
The slowdown in refractive business growth is related to changes in the economic environment. The company's optometry sector achieved revenue of 4.960 billion yuan, an increase of 31.25% over the previous year. The company's brand influence has gradually increased, hospital myopia prevention and control methods and product categories have been continuously improved and upgraded, and the 5P myopia prevention and control system has been further promoted, which has promoted the rapid development of the optometry business. The 2024Q1 company's revenue growth rate reached 3.50%, and the growth rate slowed. The main reason is that the Q1 base was high in '23, and the consumer-related business was still under pressure in '24, which led to a decline in growth in the first quarter. By sector, the revenue growth rate of the refractive light business was about 4.2%, achieving steady growth. The cataract sector declined 1.4% year-on-year in the first quarter of '24 due to a high base in the first quarter of '23, compounded by the southern ice disaster affecting patients' travel.
The regional market layout has been gradually improved: the company is steadily implementing the “1+8+N” strategic layout, continuing to promote the construction of regional ophthalmology centers in central cities and key provincial capitals, continuously improving the vertical hierarchical chain network system within each province and region, and at the same time speeding up the construction of a hierarchical diagnosis and treatment network of multiple hospitals and optometry clinics (clinics) in the provincial capital city. Ophthalmology centers in Changsha, Shanghai, Guangzhou, Chengdu, and Chongqing are already in operation, construction is underway in Wuhan and Shenyang, and preparations have begun in Beijing and Shenzhen. By the end of 2023, the company had 256 hospitals and 183 outpatient departments. As the scale of medical networks continues to expand, the advantages and scale effects of hierarchical chains have been further highlighted.
Management efficiency has improved, and net profit margin has increased: in 2023, the company's gross margin was 50.79%, which is basically the same as 50.46% in the same period last year. The net interest rate was 17.95%, up 1.26 percentage points from 16.69% in the same period last year. As the size of the company expanded, the scale effect became prominent. At the same time, the company's management efficiency was further improved, and the management expense ratio dropped to 13.11% from 14.24% last year. With the increase in the company's net interest rate, the company's profitability was further strengthened.
Maintaining the “Recommended” rating: China's ophthalmology services have grown rapidly in recent years. Considering the large number of people with ophthalmic diseases in China, the industry will maintain rapid growth in the future.
Aier Ophthalmology has a nationwide layout and is a leading ophthalmology medical service company in China. The company's current expansion model enables its rapid, low-risk, and high-quality development. The company's main business segment: the market for refractive, optometry and cataract surgery is broad. The growth rate has been rapid in recent years, helping the company's performance to grow steadily. Considering changes in the ophthalmology market, we adjusted the company's profit forecast (the original forecast net profit for 2024-2025 was 4.721 billion yuan and 6.045 billion yuan, respectively), and the net profit for 2024-2026 was 4.185 billion yuan, 5.376 billion yuan, and 6.923 billion yuan, respectively. Considering the good development prospects of the company's industry and the company's leading position in the ophthalmic care service industry, we maintain the company's “Recommended” rating.
Risk warning: 1) Risk that the industry will grow less than expected: The growth rate of the ophthalmology medical service industry may be lower than expected, which will affect the growth of the company's performance. 2) Risk that the acquisition or construction of new hospitals falls short of expectations: When a newly built hospital is acquired, the acquisition may not go smoothly, cannot be completed on schedule, or some hospitals and clinics may not be able to complete the acquisition due to a series of reasons, which affects the growth of the company's performance. 3) Risk of an outbreak of an epidemic infectious disease: If an epidemic infectious disease breaks out, it may affect the normal operation of the company, thereby affecting the company's performance growth.