Events:
The company released its 2023 semi-annual report.
Comments:
The high base of sterilized wipes put short-term pressure on the performance. The decline in revenue in the second quarter narrowed 23H1's operating income of 280 million yuan, down 22.26% from the same period last year, mainly due to the significant reduction in sales of disinfection wipes. On the profit side, the company realized a net profit of 65.1007 million yuan attributed to the parent company, down 26.98% from the same period last year, and 52.7944 million yuan after deducting non-recurring gains and losses, down 39.02% from the same period last year. 23H1's gross profit margin was 33.04%, up 0.53% from the same period last year, and the sales / management / R & D expense rates were 1.33%, 7.99% and 4.03%, respectively, and increased by 0.68% and 4.38% respectively. 23H1's net interest rate was 23.25%, down 1.55% from a year earlier. In terms of Q2 alone, the company realized operating income of 152 million yuan, down 15.21% from the same period last year, and realized net profit belonging to the parent company of 27.8301 million yuan, down 33.27% from the same period last year. The gross profit margin was 29.21%, down 2.68% from the same period last year. The net interest rate was 18.28%, down 5.03 percentage points from the same period last year.
The second class certificate of Jiechuang Medical, a subsidiary, was approved. From the point of view of the layout and reorganization of collagen, the income of 23H1's wipes products was 231 million yuan, down 26.06% from the same period last year, and the gross profit margin was 26.65%, down 2.25% from the same period last year. The revenue of mask products reached 29.4831 million yuan, down 8.30% from the same period last year, and the gross profit margin was 48.98%, down 3.09% from the same period last year. The new line of washing and care products added in 2022 generated 1.0429 million yuan in revenue from 23H1, with a gross profit margin of 37.53%. In 2022, the company set up a joint venture with Chuangjian Medical to lay out collagen, and the cosmetics business was covered by "makeup" products to higher value-added "mechanical" products. The joint venture Jiechuang Medical has obtained two type II medical device registration certificates of recombinant collagen dressing and recombinant collagen liquid dressing on August 22, 2023, which is expected to continue to enrich the company's makeup layout and create the second pole of growth.
Investment advice and profit Forecast
The company is a leading manufacturer of wet wipes in China, cutting into the cosmetic track layout to recombine collagen. From 2023 to 2025, we expect to achieve an income of 7.34, 869, 998 million, a net profit of 1.71, 2.01 / 230 million, and an EPS of 1.93, 2.31, 2.66, respectively, corresponding to PE19/16/14x, maintaining a "buy" rating.
Risk hint
The risk of intensified competition in the industry, the risk that the cosmetics business expansion is not as expected, the risk that the project production schedule is not as expected, and the risk of industry policy supervision.