Net profit returned to mother in 2023 +131%, continuing the high growth trend, in line with previous expectations. (1) 2023 performance:
Revenue of 2,654 million/ +24.59% and net profit to mother of 416 million/ +131% were at the center of the previous forecast. (2) 23Q4 performance: revenue of 672 million/ +22.74%, net profit to mother of 89 million/ +377%, mainly due to factors such as depreciation in 22Q4, which affected the base, and the results were in line with expectations.
Sales restructuring led to an increase in gross margin, and net profit margin improved significantly year-on-year. (1) 2023 performance: The increase in high-margin hyaluronic acid revenue increased the overall gross margin by 1.52pcts to 70.50%; the period expenses were 52.38%, a year-on-year decrease of 3.47pcts, of which the sales rate was 30.69% /-1.21pcts, the management rate was 15.74% /-3.14pcts, and the net profit margin was 15.68%, up 7.21pcts year on year. (2) 23Q4 performance: gross margin was 67.13%, up 1.26% from 22Q4, down 5.71% from 23Q3, sales rate was 28.09%, down both year on year and month on month, management rate was 15.52%, up 1.28% year on year, down 1.63% month on month, net profit margin was 13.29%, up 9.87% year on year, and 4.88% month on month, showing high profitability.
The medical and aesthetic business continues its high growth trend and reserves a variety of new products. (1) Overall management: In 2023, the medical and aesthetic business achieved revenue of 1,057 million/ +41.27%, surpassing ophthalmology as the largest business. Among them, hyaluronic acid revenue was 602 million/ +95.54%, human epidermal growth factor was 171 million/ +13.58%, and radio frequency and laser equipment were 284 million/ -1.97%; (2) Hyaluronic acid product split: third-generation hyaluronic acid Haimei products achieved revenue of over 230 million yuan and an increase of 129.32% in 23 years. 94.14% increase 57.70%. It is estimated that Haimei will continue to consolidate its position as high-end hyaluronic acid in 24 years, and is expected to continue to penetrate under compliance development after the new “Jiaolan Lip” indication is approved; (3) New product planning: 1) Fourth-generation crosslinked products are already in the registration review stage; 2) Domestic registration and listing of Cytosial hyaluronic acid is being promoted; 3) Reserve topical product ET-01 (phase II clinical trials have been launched in the US) and AI-09 botulinum toxin injections; 4) promote the launch of various optoelectronic products in China.
The national procurement of ophthalmology was launched, and orthopedic restorative growth. (1) Ophthalmology business: 2023 revenue was 928 million/ +20.57%, 1) Cataract business: revenue was 497 million/ +35.07%, recovering after the epidemic, and increased 12.9% from 2021. Domestic production and production of artificial crystals were launched in November 23, which is expected to increase market share in exchange for price and volume, which is expected to affect terminal sales in the short term; 2) Myopia prevention and refractive correction product line: revenue of 401 million/ +5.82%, and the resumption of global production and operation is driving the recovery of optometric materials while continuing to restore optometric materials Expansion, vision Terminal materials are under slight pressure, mainly due to the sale of Hebei Xinshikang in July '22 (revenue of 13.51 million in '22), which will increase the promotion of “Meierkang MyOK” and “Children's Fun” in '24; 3) The 24-year plan focuses on promoting registration and clinical trials of various products. (2) Orthopedic business: 23 years of revenue of 476 million/ +22.56%. Medical chitin (for intra-articular injections) achieved 26.05% revenue growth in exchange for price, and osteoarticular injection products ranked first in the country for 9 consecutive years.
Investment proposal: As a leading biomedical materials company, Haohai Biotech has built pipelines such as “injection filling+photoelectric instrument+botulic+collagen”, and collects “price for quantity” of artificial lenses, and is optimistic about “medical+pharmaceutical” two-wheel drive. Operating revenue for 24-26 is estimated to reach 3.241/38.24 billion/ 4.333 billion, and net profit to mother will be 498 million/627 million/755 million, an increase of 20%/26%/20%. The corresponding PE is 36X/29X/24X, maintaining the “increase” rating.
Risk warning: macroeconomic expectations have returned to low expectations; competition in the medical and aesthetic market has intensified; product approval falls short of expectations.