Summary of the report:
Events:
According to Longzi's quarterly report for 2023, the company's revenue in the first three quarters was 3.694 billion yuan / + 22.06%, the net profit was 194 million yuan / + 585.75%, and the non-return net profit was 175 million yuan / + 459.78%. The non-recurrent profit and loss of 19 million yuan mainly comes from government subsidies and dealing with the profits and losses formed by long-term assets. Single Q3 realized revenue of 1.216 billion yuan / + 23.94%, net profit of 47 million yuan / + 339.57%, and non-return net profit of 36 million yuan / + 274.83%.
Comments:
Accelerate the layout of medical beauty and strengthen the brand positioning of the head. Beijing Langzi Medical Management, a subsidiary of the company, acquired 90% of Wuhan Wuzhou and 70% of Wuhan Hanchen in June 2023. The two companies were included in the company's consolidated statement in the third quarter. The company's medical and beauty sector expanded steadily and its scale advantage was further expanded. In addition, the medical venture capital fund Boheng II established by the company has been successfully put on record, mainly investing in the shares of unlisted companies in the field of medical beauty and related industries in the form of equity investment, and the company will continue to accelerate the layout of the national medical and beauty territory and strengthen the head brand effect of medical beauty.
The scale effect highlights the steady decline in the expense rate. The rate of expenses for the first three quarters of the company 52.55%/-4.48pct, of which: 1) sales expenses 1.511 billion / + 33.12%, sales expenses rate 40.91% Accord 1.70pct 1.85%/-1.31pct 2) Management expenses 296 million / + 24.21%, management expenses 8.01% Accord 0.93pctmit3) R & D expenses 68 million /-18.85%, R & D expenses rate 4) the financial expense is 65 million / + 6.48%, and the financial expense rate is 1.77% Maxim 0.53pct. Except for the company to promote efficient R & D and reduce R & D expenses, the rest of the expenses have increased in absolute value, but with a substantial increase in the scale of revenue, the expense rates have decreased significantly. Q3 single-quarter company expense rate 52.58%/-4.97pct, including sales expense rate 41.51%/-0.89pct, management expense rate 7.85%/-1.52pct, R & D expense rate 1.56%/-1.61pct, financial expense rate 1.65%/-0.95pct.
Investment suggestion: the company has gradually created three major sectors: medical beauty, women's clothing and baby children from the cross-border "medical beauty". The clothing business has recovered well, and the medical and beauty business has entered a stage of steady expansion and profit climbing, which is expected to gradually usher in the release of profits. It is estimated that the company's revenue from 2023 to 2025 is 4.69 billion / 5.435 billion / 6.111 billion, the return net profit is 258 million / 322 million / 379 million, and the corresponding PE is 38 times / 31 times / 26 times respectively. Maintain a "buy" rating.
Risk tips: store expansion is not as expected; medical and beauty policies are stricter; performance forecasts and valuation judgments are not up to expectations.