The company released its 23-year performance forecast, which was slightly lower than market expectations. 1) The estimated revenue for '23 was 6.08 billion yuan, down 4.4% year on year. Net profit to mother is estimated to be 587 million yuan, down 39.5% year on year, after deducting non-net profit of 487 million yuan, down 42.8% year on year. 2) Based on the results of the first three quarters, it is estimated that in the 23Q4 quarter, revenue is expected to be 1.86 billion yuan, down 8.8% year on year, and net profit to mother is 73 million yuan, down 75% year on year. Non-net profit of 54 million yuan was deducted, a year-on-year decrease of 78.5%. Profit side fluctuations in '23 were mainly due to falling gross profit, depreciation and amortization expenses.
At the time of management changes, the medical and aesthetic raw materials sector was already very effective. The company continues to promote the “four-wheel drive” business layout, actively break away from past successful path dependency, and continue to promote the comprehensive upgrading and implementation of management changes. Management change is an inevitable move for the company to promote strategic upgrading and achieve long-term steady business growth, but it is affected by differences in the competitive environment, development stage and development model of each business, and has different effects on each business in the short term. Among them, the raw materials business still achieved steady growth, the medical terminal business maintained rapid growth, and the functional skincare business experienced a phased decline, while functional skincare products accounted for the largest share of the company's total revenue, so total revenue declined slightly compared to the same period last year.
Adhere to R&D to empower front-end business, and the health industry chain complements each other. The company will continue to focus on synthetic biology, adhere to the overall positioning of biotechnology companies and biomaterials companies, use technological power to build product power, shape brand power, further increase cost reduction and efficiency, and promote the continuous steady and healthy growth of the company's business. The core advantage is recombinant collagen, ecdoine, high-purity ergothione, etc., and there are sufficient reserves for research projects to protect product-side R&D barriers.
Marginal improvements in the skincare sector are imminent. With 38 major promotions, Quadi joined hands with Renbaiyan to prepare for the battle, and Li Jiaqi collaborated on 3 classic second-hand products. At the Li Jiaqi Beauty Festival on March 4, the company's two major brands, Quadi and Runbaiyan, cooperated with leading influencers. Quadi was led by multiple oil suspensions and blue copper peptides. The unit price of the product was about 350 yuan.
Runbaiyan collaborates on the classic large single product barrier conditioning second coat (white gauze). The level of cooperative promotion is basically the same as Double 11 in '23. The company has prepared relatively well in this 38 major promotions, is very sincere about products and discounts, and is optimistic that the promotion performance will explode.
The company is a bioactive substance platform enterprise. Based on the advantages of synthetic biology research and development, the company promotes the development of 4 branches: hyaluronic acid raw materials+medical terminals+functional skin care terminals and functional food terminals. Management changes are expected to be successful in 24 years, leading to marginal improvements in performance. Considering that the 23-year performance forecast was slightly lower than market expectations, and that the company's gross margin declined, the company's revenue growth forecast was lowered, and the profit forecast was lowered. Net profit for 23-25 is estimated to be 587/7.07/961 million yuan (original profit forecast of 8.5/10.3/1.25 billion yuan for 23-25), corresponding PE of 52/43/32 times, respectively. Maintaining an “gain” rating in view of the recovery in performance brought about by the 24-25 changes.
Risk warning: Competition in the industry is intensifying, consumption is weak, compliance regulations in the medical and aesthetic sector are becoming stricter, cost control falls short of expectations, management changes have fallen short of expectations, and the progress of ongoing research projects has fallen short of expectations.