Events:
On October 24, 2023, the company released its third quarter report for 2023, in which 2023Q1-Q3 achieved revenue of 30.395 billion yuan and net profit of 2.189 billion yuan, an increase of 9.10% and 10.48% respectively over the same period last year.
Thanks to the rapid development of the medical and beauty business, 2023Q1-Q3 's performance has grown steadily:
On the revenue side, 2023Q1-Q3 achieved revenue of 30.395 billion yuan, an increase of 9.10% over the same period last year. Among them, 2023Q1-Q3 pharmaceutical industry (including CSO business), pharmaceutical commerce, and the medical and beauty sector (excluding internal offset factors) achieved revenue of 8.994 billion yuan (+ 9.48%), 20.291 billion yuan (+ 6.99%) and 1.874 billion yuan (36.99%), respectively.
On the profit side, 2023Q1-Q3 achieved a net profit of 2.189 billion yuan, an increase of 10.48 percent over the same period last year. Thanks to the rapid development of the medical and beauty sector, the company has achieved steady profit growth.
The medical and beauty business continues to develop rapidly, and the sales of the core product Eyanshi continue to expand:
The company uses the globalization strategy to lay out the medical and beauty plate, and the medical and beauty business is developing continuously and rapidly. Among them, in the overseas market, Sinclair, a wholly-owned subsidiary of 2023Q1-Q3, achieved 973 million yuan in revenue, an increase of 23.27% over the same period last year; in the domestic market, 2023Q1-Q3 Xinkeli Aesthetics achieved revenue of 824 million yuan, an increase of 88.79% over the same period last year. Sales of core product Eyanshi continued to expand. The company creates a "one-stop" facial rejuvenation program through Eyanshi, optoelectronic radio frequency products Reaction Ruiai, skin color management products Kuxue Glacial Spa, etc., and the medical and beauty business is expected to maintain a trend of rapid development.
With the in-depth layout of GLP-1 targets, Lilaru peptide injection is expected to increase its dose quickly:
The company has established GLP-1 and related target 8 products covering oral, injection and other dosage forms, including long-acting and multi-target global innovative drugs and biosimilar drugs. Among them, the indications for diabetes, obesity or overweight of Lilaluptide injection were approved to market in March 2023 and July 2023, respectively, and it is expected that the product can achieve rapid sales volume through the company's sales channels; Simeglu Peptide injection has started the Ⅲ phase clinical trial and completed the first case of subjects in the group in September 2023.
Investment advice:
We expect the company's net profit from 2023 to 2025 to be 2.98 billion yuan, 3.602 billion yuan and 4.306 billion yuan respectively, an increase of 19.2%, 20.9% and 19.5% respectively over the same period last year. It is estimated that the EPS in 2023 will be 1.70 yuan per share, giving the current PE 30 times, corresponding to a six-month target price of 51.00 yuan per share, with a Buy-An investment rating.
Risk tips: the progress of research and development is not as expected; the sales of products on sale are not as expected; the price reduction of drugs is higher than expected.