Core views:
The company announced that it plans to acquire 100% of the shares in Jimei, Zhengzhou, in cash for 155 million yuan. According to the company's announcement, Beijing Langzi Medical Management, a wholly-owned subsidiary of the company, signed equity transfer agreements with Bochen 9, Wuhu Jujin, and Wu Hongming respectively to acquire 70%, 18%, and 12% of the shares in Jimei, Zhengzhou (with an estimated value of 155.15 million yuan) in cash, respectively. This transaction is a merger of companies under the same control, and financial reports will be adjusted retroactively.
Jimei, Zhengzhou, is expected to have strong sustainable profitability in the future. Established in October 2020, Jimei, Zhengzhou, specializes in medical and aesthetic services, with a business area of 6586 square meters, including plastic surgery, minimally invasive aesthetics, cosmetic dermatology, etc.; achieved operating income/net profit/net assets of 6933.04/-1717.68/-377.38 million yuan in 2022; and achieved operating income/net profit/net assets of 10586.01/769.28/ -293.452 million yuan in 2023. Bochen made a performance commitment to Jimei, Zhengzhou on the 9th: the target net profit for 2024/2025/2026 will not be less than 105/122/15.29 million yuan, respectively, and the cumulative total will not be less than 38.65 million yuan.
The company's overall business recovery is good. Continued mergers and acquisitions of medical and aesthetic institutions are expected to enhance the scale of the medical and aesthetic business and the competitiveness of the industry. According to the company's 2023 performance forecast, it is expected to achieve net profit of 200-250 million yuan in 2023, an increase of 835.99%-1069.99% over the previous year. Mainly the women's clothing business and medical and aesthetic business have been steadily repaired and recovered well. Beijing Langzi Medical Management has acquired 75% of Kunming Han Chen's shares, 90% of Wuhan Wuzhou's shares, and 70% of Wuhan Han Chen's shares, all of which meet the 2023 performance promise. The acquisition of Jimei, Zhengzhou is expected to further optimize and improve the financial situation of the medical and aesthetic business and increase the scale of the medical and aesthetic business. The company is speeding up the medical and aesthetic business layout under the dual drive of endogenous and epitaxial extension, which is conducive to enhancing the scale and competitiveness of the company's medical and aesthetic business and further accelerating the national layout.
Profit forecast and investment advice: EPS is expected to be 0.53 yuan/share, 0.70 yuan/share, and 0.87 yuan/share in 2023-2025, respectively. Using the segmented valuation method, we expect the reasonable value of the company to be 25.84 yuan/share, maintaining a “buy” rating.
Risk warning. Women's clothing valuation deviation risk; risk of medical and aesthetic valuation falling back; business model risk.