Events:
The company released the third quarter report of 2022.
Main points of the report:
Q3 performance is under pressure, goodwill impairment lowers profits
2022Q1-3, the company achieved operating income of 2.142 billion yuan, down 19.61% from the same period last year; net loss of 657 million yuan, down 653.82% from the same period last year; and net loss of 663 million yuan, down 680.83% from the same period last year. Among them, the company's single Q3 realized revenue of 726 million yuan, down 3.71% from the same period last year, and the net loss of homing was 499 million yuan, down 704.35% from the same period last year. The company's sales gross profit margin was 4.94%, down 11.85Pct from the same period last year, and the sales / management / R & D expense rates were 1.57%, 6.73% and 4.26%, respectively, and the year-on-year changes were-0.09/+1.93/+0.88Pct. The company's net interest rate was-30.63%, down 35.08Pct from the same period last year.
The company's profit decline is mainly due to the company's provision of 452 million yuan for goodwill impairment related to Tinos Bell in Q3. After this provision for goodwill impairment, the remaining goodwill is 0. Excluding this effect, the company Q3 achieved a net loss of 46 million yuan, narrowing the loss.
Divesting turpentine business, cosmetic ODM leader is waiting to set sail again in September 22, the company announced that it intends to transfer two wholly-owned subsidiaries to divest turpentine deep processing business, focusing on the large consumer business dominated by cosmetics business, and has intended to negotiate with the transferee. In October of the same year, the company announced a preliminary plan to issue A shares to a specific target. After the completion of this issue, the company will get rid of the state of no controlling shareholder and actual controller. Mr. Lin Shida and his concerted actor, Hong Kong Northbell, as the company's largest shareholder and second largest shareholder, the company's controlling shareholder and actual controller will be changed to Mr. Lin Shida. After management changes and business adjustments, the company will focus on strategy and management.
Investment advice and profit Forecast
The company is the leader of domestic cosmetics ODM, leading in R & D strength and product innovation ability. Since the third quarter of 21, due to the fluctuation of raw material prices, the landing of new industry regulations, employment and production capacity expansion and other internal and external factors, income and profits are under short-term pressure. Taking into account the impact of the company's goodwill provision on profits, we downgrade the company's profit forecast for 2022. It is expected that the company will achieve a net profit of-4.84x61max in 2022-2024, with an EPS of-0.991max and 0.32p, corresponding to PE-7/20/12x, maintaining the "overweight" rating.
Risk hint
Raw material price fluctuation risk, cosmetics business market demand fluctuation risk, customer expansion is not as expected risk.