Items:
The company announced its three-quarter report in 2023, with an income of 5.611 billion yuan (- 9.40%), a net profit of 386 million yuan (+ 3.58%), and a net profit of 311 million yuan (+ 19.60%). The company's performance is in line with expectations.
Among them, Q3 achieved an income of 1.84 billion yuan (- 6.36%) in a single quarter, a net profit of 163 million yuan (+ 4.20%), and a net profit of 133 million yuan (+ 15.61%).
Peace viewpoint:
The integration of the company and China Resources has been completed in three or nine hundred days and has entered an one-year integration stage. In the 100-day integration stage, the company and China Resources Sanjiu solidly promote the integration at the strategic, organizational and cultural levels. Next, we will push forward the next stage of integration in accordance with the requirements of value reshaping, business reshaping, organizational reshaping and spiritual reshaping. At the same time, the company's business continues to focus on chronic disease management and high-quality traditional Chinese medicine business, promoting the company's CHC business and products into Sanjiu Business Road. By the end of the third quarter, the company's CHC plate has completed the integration of first-level channel merchants in 20 provinces and regions in China. The key varieties of Kunming traditional Chinese medicine, such as Shenling Jianpiwei granules, Shugan granules, Xiangsha Pingwei granules, Banlan Qingre granules, Qingfei Huatan pills, all increased by more than 30% in the third quarter. In terms of the industrial chain of Panax notoginseng for chronic disease management, Q3 single-quarter Xuesaitong oral products increased by more than 10% compared with the same period last year, of which Xuesaitong soft capsules increased by more than 20%.
Q3 improved profitability in a single quarter and is optimistic that the development potential will continue to be released. 23Q3's single-quarter gross margin is 45.24% (- 1.16 pp) and net profit is 9.00% (+ 0.76 pp). The increase in net interest rate is mainly due to the decline in the rate of management expenses, which is 3.82% (- 1.47 pp), which we think reflects the improvement of management efficiency. The quarterly sales expense rate, R & D expense rate and financial expense rate were 30.13% (- 0.82 pp), 0.69% (- 0.29 pp) and 0.20% (- 0.29 pp), respectively.
The company has entered a new stage of development and maintains a "recommended" rating. With the deep integration with China Resources Sanjiu, and business focus, the company is about to enter a new stage of development. We maintain the company's 23-25 net profit forecast of 568 million yuan, 688 million yuan and 829 million yuan respectively, and the current stock price is 22 times PE in 2024, maintaining the "recommended" rating.
Risk hint. The main results are as follows: 1) the dose of injection is less than expected: the injection is affected by factors such as collection and docking of medical insurance, and there is a risk that the dose is less than expected. 2) the integration of M & An is not as expected: after the change of the controlling shareholder, the progress of the integration may not be as expected. 3) R & D risk: there are many kinds of research in the company, and there is a risk that the progress is not as expected or failure.