Incident review
The company announced its 2023 performance report. In 2023, the company achieved operating income of 6.081 billion yuan, a decrease of 4.4%; realized net profit of 587 million yuan, a decrease of 39.5%; and realized net profit of 487 million yuan without return to mother, a decrease of 42.9%. According to the performance report, 23Q4 revenue is expected to be 1.86 billion yuan, down 8.8%; 23Q4 achieved net profit of 73 million yuan, a decrease of 75.1%; 23Q4 after deducting net profit of non-return to mother of 54 million yuan, a year-on-year decrease of 78.5%.
Incident reviews
The decline in skincare products affected revenue, falling gross margins, and discounted expenses dragged down net interest rates. The company promoted a comprehensive upgrade of management changes during the reporting period, but due to differences in the competitive environment, development stages and development models of various businesses, it had different effects on various businesses in the short term. Among them, the raw materials business grew steadily, the medical terminal business developed rapidly, and the functional skincare business experienced a phased decline, which became the main reason for the slight decline in revenue. At the same time, raw materials, cosmetics and other businesses are affected by factors such as the competitive environment, and gross margins are under pressure. In addition, large upfront investment has led to an increase in expenses such as depreciation and amortization, and the company's profit margin has declined.
Management changes are coming to an end, and the cosmetics business is expected to improve, and hot and new products are expected to drive high growth in the medical and aesthetic business. The company's cosmetics business has been adjusted for nearly a year. Referring to the effects of past medical and aesthetic business adjustments, the cosmetics business is expected to reach an inflection point in 24 years. The medical and aesthetic business has good product potential, and is expected to maintain high growth, benefiting from compliance and stable new product launches. Furthermore, 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. S
Profit forecast and investment suggestions: According to the adjustment pressure faced by the company in the short term, we adjusted the company's profit forecast. The company's net profit from 23 to 25 is estimated to be 590 million yuan/750 million yuan/980 million yuan respectively. The company's cosmetics business is expected to reach an inflection point, maintain high growth in medicine and beauty, and maintain a “buy” rating.
Risk warning:
Industry prosperity declined, industry competition intensified, and cosmetics business growth fell short of expectations.