Medical-aesthetic+biopharmaceutical two-wheel drive, powerful R&D, production and marketing platforms enable integrated strategic integration. The company clarified the four-wheel drive strategy for medical aesthetics and biopharmaceuticals in 2020. Relying on a strong R&D, production and marketing platform to implement integrated strategic integration, the company quickly occupied an important position among upstream medical aesthetic and biopharmaceutical manufacturers. In the future, the company will continue to accelerate the process of improving R&D, production and marketing capabilities and external cooperation, prioritizing and seizing development opportunities.
The medical and aesthetic industry is booming, and Letibao helped break into the medical and aesthetic field. The growth rate of China's medical and aesthetic market is high, with a penetration rate of only 2%. Compared with developed countries, it is expected that there will be more than 5 times more room for growth in the future. As early as 2014, Beauty Space signed an exclusive agency agreement with South Korea's HUGEL company to lay out the medical and aesthetic industry in a forward-looking manner. In 2020, “Letibao”, the leading medical and aesthetic product of Sihuan, was successfully approved in China. Letibao has three significant advantages: high quality, good results, and high cost effectiveness. Together with the sales team formed by Eljian's original team, Letibao will achieve rapid sales. By setting up product research institutes overseas to enhance research and development capabilities for medical and aesthetic products. While botulinum toxin is rapidly being released, a number of new “self-developed+agent” products will be launched within three years, supporting the growth of the company's medium- to long-term medical and aesthetic performance.
Driven by innovation and combined with imitation, the biopharmaceutical business is well-stocked. 1) Innovative drugs: comprehensive layout in the field of oncology and diabetes, product development progress is ahead of the industry, and the layout and coverage of long, medium and short pipelines are balanced; 2) Generic drugs: generic drugs with abundant research reserves and 53 high-tech barriers; evidence-based research has reshaped the market position of Klein Ao, which will achieve a recovery in sales; 3) The API, industrial hemp and CDMO business is still in the development period, which will bring increased profitability to the company in the future.
Profit forecast and investment rating: We are optimistic about the advancement of the company's medical-aesthetic+biopharmaceutical dual-wheel drive strategy and the market prospects of botulinum toxin products and other products under development. The company's revenue for 21-23 is estimated to be 387/ 540/ 7.76 billion yuan respectively, and the net profit of the mother is 9.4/13.0/ 1.89 billion yuan respectively. The current stock price corresponds to the 2021 P/E of 15.35X, giving it a “recommended” rating.
Risk warning: promotion of medical and aesthetic products fell short of expectations; product development registration failed; changes in the industry policy environment; industry competition intensified; sales of Clinao fell short of expectations.