Haohai Biotech announced its 2023 three-quarter report. The first three quarters achieved operating income of 1,982 million yuan (up 25.23% year on year); net profit of 327 million yuan (up 102.04% year on year); net profit after deducting non-return net profit of 305 million yuan (up 116.86% year on year). On a quarterly basis, 2023Q3 achieved operating income of 669 million yuan (up 8.80% year on year); realized net profit of 122 million yuan (up 34.0% year on year); and realized net profit of 117 million yuan after deducting non-return net profit (up 33.84% year on year).
Opinion: 2023Q3 hyaluronic acid revenue increased by more than 50%, and hyaluronic acid emissions led to high revenue and gross margin growth. The company has formed a business layout “driven by both medical aesthetics and ophthalmology, collaborative development of orthopedics and surgery”, which can be expected in the future.
Aesthetic medicine is growing beautifully, ophthalmology is developing steadily, and the company's business layout is becoming more and more clear. 2023H1 revenue split by product line: 1) Medical beauty: Revenue of 485 million yuan (up 47.49% year on year), accounting for 37.03%.
Hyaluronic acid sales revenue was 256 million yuan (up 114.35% year on year), and Haimei achieved revenue exceeding 115 million yuan in the first half of the year (up 377.37% year on year), accounting for about 45% of hyaluronic acid revenue. Currently, Haimei has entered an upward channel of product volume, with huge potential for growth. 2) Ophthalmology: Revenue was 481 million yuan (up 34.98% year on year), accounting for 36.70%, and intraocular lenses achieved revenue of 204 million yuan (up 58.15% year on year). It is expected that the high-end hyaluronic acid “Haima” will continue to lead growth in the future, and its share is expected to increase.
Based on R&D and innovation first, the company continues to iteratively launch new products to lay the foundation for long-term growth. As of June 30, the company has a total of 17 research projects (7 in ophthalmology, 6 in medical aesthetics, 4 in orthopedics).
1) Ophthalmology field: In June, the innovative hydrophobically molded aspherical intraocular crystal was approved for listing in China; the hydrophobically molded aspherical trifocal intraocular crystal obtained ethical approval and clinical trials in July; the second generation of aqueous water-permeable PRL products are undergoing clinical trials; 2) Medical and aesthetic field: Fourth-generation organic cross-linked hyaluronic acid products have completed clinical trials and entered the registration and application stage; 3) Orthopedics: Large-scale sodium hyaluronate injection products have entered the clinical application stage, and various R&D projects are progressing in an orderly manner to store energy for the future.
The rapid release of high-end hyaluronic acid promoted an increase in gross margin, and the cost ratio remained stable during the period. 2023Q3: Gross margin was 72.84%, up 2.43pct year on year, up 2.20pct month on month. We speculate that it is mainly driven by rapid release of high-end hyaluronic acid; sales expense ratio is 30.61%, up 0.64pct year on year, down 0.63pct over month; management expense ratio is 17.15%, down 0.56pct year on year, up 2.16pct over month; R&D expenses are 7.89%, up 0.65pct year on year, up 1.08pct over month.
Profit forecast and investment recommendations: We expect the company to achieve net profit of 456 million yuan, 568 million yuan, and 683 million yuan in 2023-2025, with year-on-year increases of 152.8%, 24.5%, and 20.2%, respectively. The current stock price corresponding to PE is 38x, 30x, and 25x, respectively. Maintain a “buy” rating.
Risk warning: New product sales promotion falls short of expectations; risk of industry policy changes, etc.