Investment highlights

Event: On the evening of February 6, 2025, the company released its 2024 performance report, with the company's revenue in 2024 being 1.410 billion yuan (+48.22%), net profit attributable to the parent company of 387 million yuan (+27.36%), and net profit not attributable to the parent company of 389 million yuan (+34.58%); 24Q4 revenue was 335 million yuan (+18.07%), net profit attributable to the parent company was 69.57 million yuan (+32.6%), and net profit attributable to the parent company was 84.3 million yuan (+75.08%), which was in line with our expectations.

In 2024, the main revenue will maintain steady growth, and the contact lens business will grow rapidly. The company's "Pronomine" and other series of intraocular lenses still maintained year-on-year growth in the context of the implementation of centralized procurement in the country, and the company's "Pronomy" orthokeratology lens revenue also maintained year-on-year growth, showing the resilience of the company's products to resist the weak economic environment and have certain rigid demand attributes. The company's vision care products (contact lenses and contact lens care products, etc.) maintain rapid growth, accounting for about 30% of revenue, and the contact lens business will turn into a profit in 2024, and we believe that with the expansion of production in 2025, the company will cut into more major contact lens customers, and the revenue and net profit margin of this business are expected to further increase.

In 2025, the blockbuster new PR crystal is expected to bring the second growth curve: the company's Longjing PR phakic intraocular lens uses patented Balacrylic balanced acrylate material, with excellent comprehensive performance, and will be approved for marketing in China by the end of 2024. Longjing PR increases the diameter of the optical part while achieving a slim volume, combined with the aspherical double concave design, the rear surface is flatter, and the surrounding arch height is more open. In addition, the large optical area of Longjing PR 6.0mm combined with the high-order aspheric zero-spherical aberration optical design does not introduce additional aberrations to achieve high-quality visual performance, and the clinical trial results confirm that it significantly reduces the probability of postoperative glare. There are a total of 10 models of the product with 0.3mm intervals, providing a more personalized and refined choice for clinical practice. The results of clinical trials showed that the change of central arch height and peripheral arch height was smaller after surgery, and the residual diopter was more stable. We believe that this product has a large space to replace femtosecond lasers and foreign ICL crystals, and we expect that this product will contribute tens of millions of revenue to the company in 2025 with reference to the current product pricing of foreign investors.

Profit Forecast and Investment Rating: Considering the increase in the proportion of contact lenses business revenue and the pre-promotion of new PR crystals, we will adjust the net profit attributable to the parent company from 2024 to 2026 from 4.13/5.33/733 million yuan to 3.87/5.09/689 million yuan, and the current market value corresponds to PE=46/35/26x.

Risk warning: fierce competition in the market; The promotion of new products is not as expected; Strategic and managerial risks associated with the expansion of operations.