Event: in 2022, the company realized operating income of 667 million yuan, an increase of-32.29%, a net profit of 141 million yuan, a decrease of 35.94%, a deduction of non-net profit of 130 million yuan, a decrease of 38.39%, and a dividend of 5.00 yuan (including tax) for every 10 shares. 2022Q4 achieved a revenue of 141 million yuan, an increase of-17.08%, and a net profit of 12 million yuan, an increase of-65.52%. 2023Q1 achieved revenue of 128 million yuan, down 29.24%, and net profit of 37 million yuan, down 21.45%.
Affected by high overseas inflation and weak downstream demand, the company's revenue and profits declined compared with the same period last year.
Comments:
The decline in sales of core customers is a drag on income, and the average prices of wipes and mask products have declined.
Split point of view, 1) 2022 company wipes revenue of 589 million yuan, down 34.50%, mainly due to the main customers Reckitt Group, Cole's sales revenue of 129 million yuan, a drop of 74.60%, leading to a sharp decline in disinfection and antibacterial wipes revenue. In terms of sales volume, the sales volume of wet towels was 112.83 billion in 2022, and the average sales price decreased slightly, mainly due to the decrease in sales of barreled sterilized wipes with higher prices. 2) the income of the mask business was 58 million yuan, down 19.73%, mainly due to a 36.34% decline in sales of hand and foot membrane products.
In 2022, the sales volume of facial film products was 7834.64 million, and the price decreased slightly compared with the same period last year, mainly due to the decrease in sales of higher-priced hand and foot membrane products. 3) the income of washing and maintenance products will be 2.1849 million yuan in 2022.
The decline in sales prices affects the performance of gross profit margin, and the effect of inventory removal appears. 1) in 2022, the gross profit margin of 2023Q1 Company was 31.47% and 37.60%, with the same increase of-1.37PCT and 4.48PCT. According to the category, the gross profit margin of wet towels and mask products in 2022 was 27.71% and 53.32% respectively, with an increase of-2.59% and-2.57% respectively, mainly due to the decline in sales prices compared with the same period last year. 2) in terms of expenses, the rate of sales and R & D expenses of the company remained basically stable in 2022, which was 1.07% and 3.79% respectively, an increase of 0.37PCT and 0.10 PCT over the same period last year; the increase in the rate of management expenses from 2.53PCT to 5.28% was mainly due to the increase in managers' salary and share-sharing payment; and the rate of financial expenses also decreased to-2.53%, mainly due to the increase in interest income and exchange income. In terms of inventory, the amount of inventory of the company by the end of 2022 was 64.1754 million yuan, down 55.01% from the beginning of the year, mainly due to the impact of the completion of delivery of the backlog of finished products with antimicrobial disinfection wipes, and the effect of inventory digestion gradually appeared.
The high base of antibacterial disinfection is gradually eliminated and the leading position is consolidated in all aspects. Affected by the epidemic and declining economic growth in 2022, the global consumer market is under pressure. In the long run, the company has strong technical advantages and customer resources, outstanding product quality control advantages, the construction of the industry moat. In terms of wipes business, as orders for antibacterial and sterilized wipes gradually return to the pre-epidemic order level, as well as changes in consumption habits and exquisite living concepts in the post-epidemic era, the market is expected to expand. As the leader of the wet towel industry, the company is expected to continue to expand its market share by virtue of strong technology, products, customers and other advantages.
Cooperate with collagen leader Chuangjian Medical to create the second growth curve. The company's cosmetics category continues to expand, and continues to cut into the sufficient collagen track. In 2022, the company established a joint venture with Jiangsu Chuangjian Medical Investment (52% owned by the company) to develop, produce and sell medical dressing products. Chuangjian Medical is the leader of collagen in China, and its products have leading advantages in medicine, medical regeneration, medical beauty and other fields, and the industry scale ranks among the top three. Chuangjian has completed the large-scale and standardized production of recombinant collagen I, II, III and XVII, filling the "ton" capacity gap in the global field of recombinant collagen materials. After the cooperation, the two sides will jointly expand the collagen market, the company has the advantages of production capacity and high-quality customer resources, Chuangjian has the advantages of raw material production, research and development, and will jointly expand international high-quality customers and cooperate in the production of functional skin care products. The company will rapidly expand customers with the advantages of existing production capacity, customers, raw materials and capital, with large room for capacity expansion, and is expected to create a second growth curve and enjoy the growth dividend of the collagen industry.
Profit forecast and investment rating: we downgrade the company's 2023-24 return net profit forecast to 1.98 million yuan (the original value is 192 million yuan), the new 25-year return net profit forecast is 223 million yuan, the current stock price corresponds to 23 years 19.50 times PE. The company's wet wipes business has a significant competitive advantage and is expected to further expand its market share. Cosmetics business adds new impetus to the company's growth, has more room for performance growth, and maintains a "buy" rating.
Risk factors: macroeconomic fluctuations, intensified market competition, inventory impairment risk and so on.