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科拓生物(300858):业绩阵痛期盼拐点 新董事上任焕活力

Ketuo Biotech (300858): Performance pains, hope for an inflection point, new director to take office and be revitalized

長城證券 ·  Dec 2, 2023 16:00

Event: The second Extraordinary General Meeting of Shareholders of the Company in 2023 deliberated and passed the “Proposal on By-election of Non-Independent Directors of the Third Board of Directors”. Lin Wei was elected as a non-independent director of the company. The term of office starts from the date of review and approval until the end of the term of the current board of directors of the company.

Consumption of probiotics has maintained rapid growth, which has strongly promoted the upgrading of the business structure. As consumers' awareness of health increased, the attention and recognition of probiotic products also increased. The company relied on core technology accumulation and enhanced marketing, and the consumption of probiotics business continued to grow rapidly. The share of probiotic consumption revenue of 2019-2023H1 companies increased from 6.46% to 61.64%. The company's edible probiotic products mainly include food-grade probiotic raw bacterial powder for enterprise customers and the “Beneficio” brand series of probiotic terminal consumer products for end consumers. In terms of customer structure, according to the 22nd annual report, B-side customers contribute the main revenue. Some large dairy products companies, pharmaceutical and health product manufacturers, daily chemical and food companies have begun to replace or try to add probiotic products produced by the company to their products; the C-side mainly uses the dealer model, and various channels such as online, offline, mother and child, beauty, and clinical nutrition adopt differentiated marketing strategies.

Industry-leading enterprise with outstanding core R&D and customer advantages. As a leading enterprise in the domestic probiotic industry, the company has a number of relevant patents and has built the largest lactobacillus strain resource bank in Asia. It has jointly carried out a number of clinical trials and accumulated detailed data support for core strains and many of the top three hospitals in China. Relying on strong R&D advantages, the company has established long-term and stable strategic partnerships with leading enterprises in the downstream industry by providing customers or jointly developing comprehensive solutions such as product formulations, corresponding process technology, product supply, and stability testing services for products already on the market.

23Q3 performance is under pressure, and we are looking forward to an inflection point. 2023Q3 achieved operating income of 77 million yuan (-28.19% yoy), net profit of 32 million yuan (-24.29% yoy), and net profit of 29 million yuan (-26.29% yoy) after deducting non-return net profit of 29 million yuan (-26.29% yoy). We expect the compound food additives business to continue to be under pressure. The gross profit margin of 2023Q3 company is 58.30% (+2.89pct year on year), mainly due to an increase in the revenue share of the high-margin edible probiotic business; 23Q3 sales/management/R&D/financial expense ratio was +2.55/-1.18/+6.93/-6.70pct, sales and R&D efforts increased and management expense ratio improved; 23Q3 company net profit margin was 41.13% (+2.11pct year on year), product structure optimization enhanced profitability.

Investment advice: The company is in a painful period of business transformation. The compounding business is under pressure, but the edible probiotics business continues to grow rapidly. The company has the core technical advantages of probiotics and has accumulated a number of high-quality and stable B-side customers to form a good demonstration effect. The C-side's active multi-channel layout is expected to increase its contribution in the future. At the same time, the appointment of a new director is expected to stimulate new business vitality. In 2023-2025, the company's revenue is estimated to be 366, 4.74, and 625 million yuan respectively, and EPS is 0.41, 0.56, and 0.74 yuan respectively. The corresponding valuations are 49, 37, and 27 times, respectively, maintaining the “buy” rating.

Risk warning: increased industry competition, regulatory policy risks, compounding business improvements falling short of expectations, probiotic customer development progress falling short of expectations, and food safety risks.

The translation is provided by third-party software.


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