Core viewpoints
After retroactive adjustment, Q3 achieved operating income of 1.216 billion yuan, + 23.94% (21.48% in the first half of the year), and the growth rate remained stable in the quarter. The net profit of Q3 is 47 million yuan, deducting 36 million yuan from non-net profit (0.11 billion yuan after adjustment in the same period last year). All parts of the company promote cost reduction and increase efficiency, and the work of the main posts has been quantified.
Last year, profits were weak under the influence of the external environment, and this year the company's profits improved significantly through the upstream channel. The company has formed a pan-fashion business ecosystem based on fashion women's clothing, medical beauty and green baby business. Medical beauty business is the main driving force of the company's development, and its operating leverage brings obvious performance elasticity.
Event
The company announced the third quarterly report of 2023: there are Wuhan Hanchen and Wuhan five continents in this reporting period, which need to be adjusted retroactively. Q3 realized operating income of 1.216 billion yuan, + 23.94% (21.48% in the first half of the year), and the growth rate remained stable in the quarter. The net profit of Q3 is 47 million yuan, deducting 36 million yuan from non-net profit (0.11 billion yuan after adjustment in the same period last year).
Brief comment
Profitability improved compared with the same period last year, and cost reduction and efficiency continued.
The adjusted gross profit margin of the company in the first three quarters was 57.6%, which was + 1pct compared with the same period last year. The proportion of the company's medical and beauty business in the non-surgical category continues to rise, driving the business gross profit margin up. The sales expense rate is 40.9%, year-on-year-1.2%, management expense rate is 8.7%, year-on-year-0.6%, R & D expense rate is 1.9%, year-on-year-0.9%, financial expense rate is 1.8%, year-on-year-0.4%. All parts of the company promote cost reduction and increase efficiency, leading to a decline in the rate of expenses.
The endogenous extension mode of medical beauty is promoted, and the industrial fund continues to hatch.
Since the establishment of Boheng No. 2 in August this year, the company has successively set up seven medical and beauty merger and acquisition funds, the overall size of which can reach 2.837 billion yuan. Through the fund's professional acquisition and incubation of medical beauty targets, it is conducive to the continuous improvement of the company's medical and beauty business scale. This quarter, the company's fund investment in Wuhan Wuzhou and Wuhan Hanchen has been merged, superimposed on Kunming Hanchen's previous merger, and the company's layout strategy in general hospitals and multiple places has been further improved. The endogenous part of the company added a crystal skin in the first half of the year, and it is expected that the store expansion will gradually speed up and the two-wheel drive model will be gradually formed.
Profit forecast and investment suggestions: considering the new consolidated table, the company's net profit for 23-25 is expected to be 233,306 million yuan, corresponding to PE is 42-32-27 times, maintain the overweight rating.
Risk analysis.
Medical malpractice: due to the differences in the physique of patients, and the quality of surgery is affected by many factors, such as the quality of doctors, diagnosis and treatment equipment, quality control and other factors, all kinds of plastic and cosmetic institutions inevitably have certain medical risks; the risk of market competition: there is a risk of rapid change in consumer demand in the middle and high-end women's wear market. The company has initially completed the basic accumulation of core resources and capabilities such as advanced medical technology in South Korea and domestic high-end medical brands and standardized management capabilities, but if it cannot maintain or enhance its original advantages in the increasingly fierce market competition, the company's medical and cosmetic business will face certain risks. The longer store training period affects the company's profit: the endogenesis + fund cultivation model of the company's medical stores develops together, and the long-term and short-term endogenetic new stores may affect the company's profit margin, for in vitro training institutions, if it can not achieve a good profit level, it will also have a certain impact on the extension speed of the company.