Main points of investment
Performance: steady income growth and slightly affected profits
2022Q1-Q3: income 266 million yuan, YOY 34.45%; return net profit 65.54 million yuan, YOY10.08%; deducts non-return net profit 60.52 million yuan, YOY5.37%.
2022Q3: income 88.3 million yuan, YOY 31.13%, return to the mother net profit 15.28 million yuan, YOY-16.26%, deducted non-return net profit 14.64 million yuan, YOY-17.00%.
Profitability analysis: Q3 gross profit margin is still affected. It is optimistic that the net interest rate of Q3 will increase under the effect of scale effect. The decline of Q3 net interest rate and the decrease of 10.2pct are mainly affected by the decline of gross profit margin and the simultaneous increase of various expense rates. The company's Q3 gross profit margin is 57.30%, which is down 4.23pct from the same period last year. We expect it to be related to the promotion of new products and the continuous adjustment of dealer preferential policies. We believe that as the impact of dealer preferential policies weakens and the impact of the epidemic on costs weakens, the company's gross profit margin is expected to pick up year-on-year from 2022 to 2024. In addition, the company's Q3 sales expense rate reached 12.08%, a year-on-year increase of 4.2pct, which is mainly related to the rapid expansion of the sales team; the R & D expense rate reached 11.35%, an increase of 2.69pct over the same period last year. We expect it to be mainly related to the company's acceleration of the number of spot varieties of independent research and development and early R & D investment in new directions such as biological reagents. We believe that the company may continue to be in the stage of high R & D and sales investment in 2022-2023, but the net interest rate is expected to continue to rise year-on-year with the expansion of revenue.
Analysis of growth capacity: inventory continues to grow, and we are optimistic that Q3 will achieve a month-on-month increase in 5pct from 2023 to 2024, which is expected to be mainly related to the fading of the epidemic in Shanghai and the opening of colleges and universities in September, and is optimistic about the sales increase brought about by the continued recovery of Q4 demand side. We found that in order to expand the number of product categories and spot scale, and actively reserve raw materials, Q3 increased by about 60 million yuan in a single quarter, maintaining the growth trend of Q2. At present, the company's inventory reached 332 million yuan, inventory turnover days reached 635 days, and still maintained an upward trend, we judge that the company is still in the spot and futures reserve expansion period. We always emphasize that high inventory is the basis of the company's future growth, and we are optimistic about the accelerated realization of the company's performance in 2023-2024.
Profit forecast and valuation
In view of the adjustment of the company's dealer preferential policies and the impact on the demand side under the epidemic, we expect the company's 2022-2024 net profit to be 110 million, 152 million and 214 million. The corresponding EPS is 0.78,1.08 and 1.52 yuan respectively. Corresponding to the closing price of November 4, 2022, the PE of 2022 is about 51 times. With reference to comparable company valuation and industry status, maintain the "overweight" rating.
Risk hint
The personnel mobility risk in the process of category expansion; the security risk in the logistics process; the uncertainty risk that the new e-commerce model brings to the company brand.