On October 30, 2023, Beinmei released its report for the first three quarters of 2023.

Main points of investment

The performance is in line with expectations, and the gross profit has improved significantly.

2023Q1-Q3 's total revenue is 1.916 billion yuan (same as a decrease of 6%), and its net profit is 49 million yuan (up 12%), of which 2023Q3's total revenue is 540 million yuan (up 14%) and its net profit is 5 million yuan (an increase of 286%). At the profit end, 2023Q1-Q3 gross margin 47.02% (+ 5pct), net profit 3.02% (+ 1pct); 2023Q3 gross margin 55.23% (+ 18pct), net profit 1.27% (+ 1pct). On the expense side, the 2023Q3 sales expense rate is 38.67% (+ 13pct), the management expense rate is 11.2% (+ 5pct), and the proportion of business tax and surcharge is 0.99% (- 0.2pct). On the cash flow side, the net cash flow of 2023Q1-Q3 operating activities is 298 million yuan (same as a decrease of 2%), and the net cash flow of 2023Q3 operating activities is 121 million yuan (same as an increase of 2%). As of the end of 2023Q3, the contract liability was 198 million yuan (month-on-month + 100%).

The management continues to be sound, and the product matrix continues to be rich.

The company has completed the new GB registration of 12 key series and 36 products. The company creates "Ainoda" series of probiotics and lactoferrin nutritious milk powder for adult customers. With the high standard of infant formula food, the products are constantly upgraded iteratively. Through innovative cooperation methods such as channel coordination and customer sharing, the company strengthens cooperation with powerful channel merchants and platform customers, and explores a new way to develop from simple business cooperation to in-depth strategic cooperation and capital cooperation.

Profit forecast

At present, the company is in a difficult reversal stage, the products are constantly iterated and upgraded, and the marginal improvement is expected to accelerate. We are optimistic that the company will continue to push through the old and bring forth the new and strive to enhance the market influence. According to the three quarterly reports, we adjust the EPS to 0.09 + 0.13 + 0.18 for 2023-2025 (the previous value is 0.12 + 0.22 + 0.31), and the current share price corresponds to the 49-33-24 multiple of PE, maintaining the "Buy" investment rating.

Risk hint

Macroeconomic downside risk, raw material rising risk, new product promotion is not as expected and so on.