自主品牌业务营收稳步增长。1）2022 年：分产品看，婴儿护理产品实现营收5.28 亿元（YOY-13.8%），毛利率为12.61%（YOY-4.72pct）；成人护理产品实现营收5.36 亿元（YOY+15.55%），毛利率为12.75%（YOY-7.03 pct）；宠物护理产品实现营收0.96 亿元（YOY+9.77%），毛利率为3.87%（YOY-4.28 pct）。Matters:
The company published its 2022 annual report and 2023 quarterly report. In 2022, the company achieved operating income of 1.19 billion yuan (YOY -0.01%), net profit of -43 million yuan (YOY -208.51%); achieved net profit of -0.5 billion yuan after deducting non-return to the mother (YOY -248.91%). 2023Q1 achieved operating income of 319 million yuan (YOY -0.88%), achieved net profit of 11 million yuan (YOY +466.92%), and achieved net profit of 310 million yuan after deducting non-return to the mother (YOY +584.94%).
Commentary:
Revenue from the own-brand business grew steadily. 1) 2022: By product, baby care products achieved revenue of 528 million yuan (YOY -13.8%), gross margin was 12.61% (YOY-4.72pct); adult care products achieved revenue of 536 million yuan (YOY +15.55%), gross margin was 12.75% (YOY-7.03 pct); pet care products achieved revenue of 96 million yuan (YOY +9.77%), gross margin of 3.87% (YOY-4.28 pct).
By model, private brands achieved revenue of 446 million yuan (YOY +14.04%), gross margin was 14.59% (YOY-7.91 pct); ODM achieved revenue of 718 million yuan (YOY -7.69%), and gross margin was 10.19% (YOY-5.08 pct); other channels achieved revenue of 23 million yuan (YOY +27.54%), and gross margin was 77.08% (YOY-4.88 pct). 2) 23Q1: Overall revenue remained flat (YOY -0.88%), mainly due to the decline in ODM business. Private brand business revenue increased 24.13% year-on-year.
Profitability improved year over year in 23Q1. The company's gross margin in 2022 was 13.1% (YOY-5.54pct), mainly due to a year-on-year increase in the prices of raw materials pulp and petrochemical products; the cost rate for the period was 11.6% (YOY-2.8 PCT), where the sales/management/R&D/financial expenses ratio was +0.38/-0.44/+0.15/-2.57 pct year-on-year. The sharp decline in the financial expense ratio was mainly due to the increase in interest income and exchange income in 2022. At the same time, the company calculated fixed asset impairment provisions of 0.6 billion yuan for related assets when the capacity utilization rate of masks and baby care products was insufficient; under the combined effect, the company's net interest rate of -7pct to -3.6% in 2022. The gross margin of 2023Q1 company has improved significantly, from +4.52pct to 16.59% year on year. The cost ratio for the period remained stable, +0.62pct to 11.45% year on year. Among them, the sales/management/R&D/financial expenses ratio was -0.34/-0.04/-0.26/+1.26pct, respectively; the net profit margin of the parent company was +2.87pct to 3.48% year on year.
Adult incontinence care leader, ODM+ own-brand two-wheel drive, maintains a “recommended” rating. The company is deeply rooted in personal care, has high-quality products and diverse channels, and has been the champion in the adult incontinence industry for many years. In the future, as the aging trend continues and penetration rate increases, the adult incontinence business is expected to enjoy industry development dividends. At the same time, the OEM business is still expected to maintain steady growth under deepening customer maintenance and quality upgrades. However, considering that the company's 23Q1 raw material costs have not improved, we expect to achieve net profit of 0.67/1.13/159 million yuan respectively in 2023-2025 (the original value in 23/24 was 0.75/126 million yuan, respectively), and that PE corresponding to the current stock price in 23-25 was 47/28/20X; referring to the absolute valuation method, the target price was 15 yuan/share to maintain the “recommended” rating.
Risk warning: Online growth falls short of expectations, the recovery of the baby care business falls short of expectations, and industry competition intensifies.
