Main points of investment
Internal strategic adjustment, 2023Q1~Q3 revenue, net profit temporarily under pressure: 2023Q1~Q3, the company realized revenue of 4.221 billion yuan (year-on-year-2.29%, the same below), realized return net profit of 514 million yuan (- 24.07%), realized deduction of non-return net profit of 433 million yuan (- 27.97%), performance slightly lower than market expectations. According to Q3 alone, the company realized revenue of 1.146 billion yuan (- 17.26%), net profit of 90 million yuan (- 56.03%) and non-return net profit of 72 million yuan (- 61.53%).
2023Q1~Q3 gross profit margin has declined, and the sales expense rate has been optimized compared with the same period last year: 2023Q1~Q3 gross profit margin / net profit margin is 73.07% / 12.01% respectively, year-on-year-4.2pct/-3.4pct.
2023Q1~Q3, the company's sales / management / R & D / financial expense rates are 46.0%, 7.6%, 6.6%, 0.6%, respectively, with year-on-year changes-1.0pct/+1.3pct/+0.2pct/+0.4pct, and the sales expense rate is optimized year-on-year.
Raw material business is growing rapidly, medical equipment is growing at a high speed, and the growth rate of skin care business is temporarily under pressure during the adjustment period: (1) in terms of raw materials: pharmaceutical grade, food grade and cosmetic grade all maintain a good sales trend. At the same time, the company also continues to make breakthroughs in various categories of raw materials business. Among them, the company currently has 7-8 kinds of collagen under research, has achieved the preparation of macromolecular recombinant collagen, and completed the listing of recombinant Ⅲ human collagen raw material products in August. (2) in terms of medical devices, orthopaedics and ophthalmology have maintained a good trend, the series of medical beauty moistening has been promoted smoothly, and the direct operation has been continuously strengthened. In addition, on October 12, 2023, the company's "Crosslinked Sodium Hyaluronate Gel for injection" was approved by NMPA for injection into the subcutaneous (or submucous) to orbicularis oris muscle layer of the red lip margin and body, and the approval of new products with different indications is expected to improve the company's product matrix of medical and beauty injections.
(3) functional skin care: the internal organizational structure-channel strategy adjustment has been implemented since the beginning of the year, while constantly improving the iteration of product upgrading, upgrading "White gauze 2.0" in August 2023, upgrading Quadi's "Huan Yan Blue throw 2.0" in October 2023, looking forward to the future under the joint promotion of internal changes and new products, the company's effective skin care sales performance can be gradually improved.
Profit forecast and investment rating: the company is the leader of the global hyaluronic acid industry and has a solid advantage of integration under "four-wheel drive". Considering the temporary pressure on the strategic adjustment and growth rate of the skin care sector, we reduced the company's 2023-25 net profit from 10.78 billion yuan in 2023 to 1.74 billion yuan in 855, 994 and-12% in 2023-25 compared with the same period last year. The current market capitalization corresponds to the 2023-25 PE43/37/31X. In view of the long-term "raw material-production-terminal" integration advantage is still stable and multi-sector growth space, maintain the "buy" rating.
Risk tips: increased competition in the industry, the promotion of new products is not as expected.