Moon lens (301101)
Event: the company announced that the annual report of 2021 and the first quarterly report of 2022 achieved an operating revenue of 576 million yuan in 2021, a year-on-year increase of 6.65%; The net profit attributable to the parent company was 82 million yuan, a year-on-year increase of 17.27%. In the first quarter of 2022, the operating revenue was 136 million yuan, a year-on-year increase of 13.26%; The net profit attributable to the parent company was 22 million yuan, a year-on-year increase of 70.01%.
The profit growth rate in the first quarter was bright, and it was easy to control the rapid volume of new products. Throughout the year, in 2021, the company’s lens / raw material / mirror business achieved revenue of RMB 452 million / 0.62 million / 56 million respectively, with a year-on-year increase of 4% / 27% / 12% respectively; With the deepening of independent brand strategy, the company’s lens product structure continued to be optimized and upgraded. At the end of 2021, the sales of functional films accounted for 49.88% (year-on-year + 0.08pct). The increase in the proportion of functional films and high refractive index lenses drove the average price to rise steadily. By channel, in 2021, the company’s direct sales / distribution / direct e-commerce / direct store revenue accounted for 60% / 30% / 9% / 0.4% respectively, with a year-on-year growth rate of 7% / 6% / 16% / 37%. By the end of 2021, there were 3262 direct sales and 78 dealer customers respectively, and the number of touch terminal glasses stores and eye hospitals exceeded 10000. In 2022q1, the company’s revenue and net profit deducted from non parent company increased by 13% and 31% year-on-year, and the profit was higher than the revenue growth rate. It is speculated that it was mainly due to the rapid and large-scale contribution of easy control new products. In June and December 2021, the company successively launched two generations of easy control series of juvenile myopia prevention and control products, forming a comprehensive layout of peripheral defocus and multi-point defocus technology paths. Relying on the outstanding advantages of product differentiation and the gradual expansion of channels, it is speculated that easy control will start quickly in 2022q1 and contribute to the main source of profit growth.
The upgrading of product structure helped improve the gross profit margin and profitability in 2022q1. The gross profit margin of the company in 2021q4 was 50.0%, with a year-on-year decrease of 5.0pct. It is speculated that it is mainly due to the rapid rise in the price of chemical and resin monomer raw materials, resulting in short-term pressure on the gross profit margin. With the increase in the proportion of revenue from differentiated products such as easy control, rapid volume and 1.71 series, the average price of lenses and profitability were driven up. In 2022q1, the company achieved a gross profit margin of 54.09%, narrowed to 1PCT year-on-year and increased by 4pct month on month. In 2022q1, the ratio of sales / management / R & D expenses was – 4.1pct / + 1.2pct/0.2pct respectively year-on-year, and the net profit attributable to the parent company increased by 5.4pct to 16.2%. The optimization and upgrading of product structure helped to steadily repair profitability.
The volume of new products and the price increase of traditional businesses are still large, and the future growth can be expected. China’s myopia prevention and control market has a broad space. The company has outstanding advantages in product differentiation of easy control new products. Relying on more than 10000 offline terminal cooperative stores at the channel end, it is expected to control new products quickly and inject short-term growth momentum; In the traditional lens business, there is still much room for price increase. In the future, the company will continue to drive the upgrading of lens product structure by means of low discount product functionalization, high discount of product structure and self owned brand of products, so as to build a medium-term force point, and the growth can be expected in the future.
Considering the impact of the epidemic, the growth assumption of traditional business income is appropriately reduced. It is predicted that the company’s net profit attributable to the parent company from 2022 to 2024 will be 123 / 152 / 189 million (previously predicted to be 134 / 167 million from 2022 to 2023). As a domestic lens leading enterprise, the company continues to deepen its medium and high-end brand strategy, the development momentum of differentiated products such as 1.71 series and easy control is good, the product price has wide room and sufficient power, and the future growth is uncertain, Give DCF a target valuation of 45.42 yuan and maintain the “overweight” rating.
Risk tips
The promotion of new lens products is less than expected; The increase of lens gross profit margin is less than expected; Risks of intensified industry competition
