Events:
The company released a report for the third quarter of 2023, with revenue of 5.184 billion yuan, an increase of 15.51% over the same period last year, and a net profit of 623 million yuan, an increase of 171.76% over the same period last year, deducting 510 million yuan of non-return net profit, an increase of 15.23% over the same period last year. The revenue of Q3 alone was 1.42 billion yuan, an increase of 0.88% over the same period last year, and the net profit returned to the mother was 107 million yuan, an increase of 532.29% over the same period last year. The non-return net profit was 95 million yuan, down 27.35% from the same period last year.
The performance is in line with expectations.
Traditional Chinese medicine is growing healthily and rapidly, and the business structure is continuously optimized.
In 2023, the income of Q1-3 company's traditional Chinese medicine health products business reached 3.442 billion yuan, an increase of 23% over the same period last year, accounting for 66.40% of the company's revenue, an improvement of 4.29pct over the same period last year, and the company's business structure continued to be optimized. The business income of self-care products was 2.34 billion yuan, an increase of 23.68% over the same period last year, of which the income of over-the-counter drug business was 1.91 billion yuan, up 24.09% over the same period last year, and that of healthy consumer goods was 430 million yuan, up 21.91% over the same period last year. The income of prescription drug business was 1.622 billion yuan, up 5.71% over the same period last year, and that of traditional Chinese medicine was 540 million yuan, up 37.75% over the same period last year. Revenue from other businesses reached 682 million yuan, an increase of 1.83% over the same period last year.
Excellent performance of core products, driving steady growth of performance
Among the core products, "Conbey" brand Changyanning series seize the market opportunity to increase brand publicity, through brand co-building with chain drugstores and scene marketing and other ways, sales income reached 1.1 billion yuan; "Conbey" brand health food on the basis of stable stock through new category expansion, new channel layout and other ways, sales revenue of more than 400 million yuan, continue to maintain rapid growth "Jinkangsuli" brand acetylcysteine effervescent tablets increased by 36% compared with the same period last year. "Jinkanglingli" brand galanthamine hydrobromide tablets also show a rapid trend in the field of neurotherapy of benign memory impairment and senile dementia.
Earnings forecast, valuation and rating
We estimate that the company's revenue in 2023-2025 will be 71.49 million yuan, with a corresponding growth rate of 19.14%, 14.66%, 14.01%, 7.02, 8.42, 986 million and 96.17%, 19.92%, 17.01%, respectively, respectively, and the 3-year CAGR will be 40.15%. With reference to the valuation of the comparable company, we give the company 20 times PE in 2024, with a target price of 6.56 yuan per share. Maintain a "buy" rating.
Risk tips: profit decline risk, raw material supply and price fluctuation risk, sales less than expected risk and so on.