occurrences
Recently, the company released the 2023 Annual Report and the 2024 First Quarter Report. In 2023, the company achieved revenue of 20.367 billion yuan (+26.43%) and realized net profit of 3.359 billion yuan (+33.07%) to mother. 2024Q1 achieved revenue of 5.196 billion yuan (+3.50%); net profit attributable to mother of 899 million yuan (+15.16%); and realized net profit of non-return to mother of 843 million yuan (+12.04%). Based on 9.299 billion shares, the company distributes a cash dividend of 1.5 yuan for every 10 shares to all shareholders.
Comment:
Strong management strength, steady expansion of the layout, outstanding resilience
23Q4 achieved revenue of 4.320 billion yuan (+41.3%) and net profit to mother of 178 million yuan (+6.3%) in a single quarter. In terms of operating efficiency, the company's sales, management, and R&D expenses in 2023 were 9.7% (-0.01pp), 13.1% (-1.13pp), and 1.6% (-0.05pp); the 2024Q1 sales, management, and R&D expenses rates were 9.4% (+0.01pp), 13.5% (+0.19pp), and 1.4% (+0.11pp), respectively. Net interest rates for 2023&2024Q1 were 18% (+1.3pp) and 18.7% (+0.8pp), respectively, increasing steadily, and cost control and profitability continued to improve.
Looking at the business structure, the cataract business achieved revenue of 3.327 billion yuan (+55.24%) in 23, with impressive growth rates, mainly due to the low base and release of backlog demand in '22; refraction achieved revenue of 7.431 billion yuan (+17.27%); and optometry achieved revenue of 4.960 billion yuan (+31.25%).
The company's business has been developing steadily, and the number of outpatient visits and surgeries reached new highs in 2023, reaching 15.1064 million and 1.183,700 cases respectively, an increase of 34.26% and 35.95% over the previous year.
The company has steadily expanded its global business footprint and service network. During the reporting period, the company had 256 hospitals and 183 outpatient departments. The number of overseas ophthalmology centers and clinics increased to 131. In 2023, the company's overseas revenue reached 2.31 billion yuan (yoy +19.5%, accounting for 11.4% of revenue).
Continuing to deepen the introduction of new technology, maintaining an international leading position, the company has stepped up efforts to introduce new global technologies and products to promote and apply new products domestically, and introduced a series of newly developed functional artificial lenses, such as the astigmatism correction artificial lens TECNIS Toric II, the continuous vision artificial lens Johnson & Johnson Eye Strength NiStecSynergy is stepless, full vision max continuous field multifocus intraocular lens and Vivity IOL with extended depth of field, to continue to promote the development of refractive cataract surgery. At the same time, we will continue to promote the application of new technologies such as femtosecond ICL and ICL implantation under 3D navigation microscopes, promote personalized femtosecond surgery technology guided by light trace tracking and ICL fifth generation (V5) crystals, and promote the development of myopia surgery to be more accurate, minimally invasive, and clear.
Investment advice: Maintaining a “buy” rating
The company is expected to achieve operating income of 239.46/283.06/33.906 billion yuan from 2024 to 2026, +17.6%/18.2%/19.8%; achieve net profit of 41.78/51.86/6.492 billion yuan, +24.4%/24.1%/25.2% year over year; maintain a “buy” rating.
Risk warning
Risk of policy changes; risk of retaining physicians and employees; risk of increased risk of industry competition.