Event: The company released its 2023 performance forecast.
1. The full year of 2023: Expected net profit to mother is 40%-430 million yuan, an increase of 122%-138% year-on-year. It is estimated that the deduction will not return 3.67 to 397 million yuan, an increase of 131%-150% over the previous year.
2. 2023Q4: The estimated net profit to mother is 0.73 to 103 million yuan, an increase of 384%-542% year-on-year. The estimated deduction is 0.62 to 0.92 billion yuan, an increase of 344%-511% over the previous year.
The high increase was mainly due to improved operations combined with last year's low base.
1. Low base in 2022: The production and operation of the company and its production subsidiary located in Shanghai were stagnant from March to May 2022, as well as asset impairment losses accrued by the company's goodwill and intangible assets of the US subsidiary Aaren Scientific Inc. in 2022, all had a significant adverse impact on the company's operating income and profit in 2022.
2. Improved business recovery: With the stability of the external business environment, the production, operation and sales situation of the company and its subsidiaries recovered steadily and continued to improve. Sales volume and revenue of various product lines, especially hyaluronic acid products, increased significantly compared with the same period last year.
Medical and aesthetic innovation is driving high growth, and ophthalmology harvesting has increased its share: 1) Medical and aesthetic sector: ① Cooperate with Donghong Yaoxing to shape the new product “Haimei Yunjing”. The scope of application is the filling of non-load-bearing bone defects. The core component is active porous CaHa hydroxyapatite bioceramics. ② In the promotion of fourth-generation organic crosslinked hyaluronic acid, it is the first product in China to block the action site of hyaluronidase. Natural products are used as crosslinkers, and the degradation products are essential amino acids for the human body, which is both longer effective and safer. 2) Ophthalmology sector: The fourth batch of national procurement bids for high-value medical consumables was opened. All three products from Haohai Biotech's subsidiary Henan Universe and Shenzhen New Industry won the bid. The procurement is expected to accelerate domestic autonomy and increase the company's product share.
Investment proposal: The company's medical and aesthetic sector continues to expand the “hyaluronic acid+optoelectronic equipment+botulism” industry layout to empower growth and build advantages in the entire industry chain layout of ophthalmology, orthopedics and other businesses, which is expected to achieve long-term performance release.
The company is expected to achieve operating income of 25.37/30.04/35.34 billion yuan in 2023-2025, and net profit to mother of 420/504/602 million yuan. The corresponding PE was 37/31/26 times, respectively, maintaining the “gain” rating.
Risk warning: macroeconomic fluctuations; policy risks; increased industry competition; product development progress falls short of expectations; new product launch performance falls short of expectations