Incident: The company disclosed the 23 annual report. Significant recovery in Q4 growth helped achieve equity incentive targets for the full year: revenue of 2,869 billion yuan/ +48%, net profit attributable to mother of 1,888 billion yuan/ +59%, net profit of 1,831 million yuan/ +52.95%.
23Q4: Revenue of 699 million yuan/ +55.6%, net profit of 439 million yuan/ +59.4%, net profit after deducting non-return to mother of 440 million yuan/ +62.2%. Demand for Q4 terminals recovered markedly and the growth rate recovered strongly after sales team adjustments, and the equity incentive target was achieved.
Revenue split: Hi Sports Q4 returned to high growth, and regeneration continued its boom for 24 years ① Solution revenue was 1.67 billion/+29%. Q4 significantly returned to the high growth channel after terminal recovery and channel expansion;
② Gel revenue is 1.16 billion/+81.4%, and regeneration is still in a booming growth stage. Among them, after being approved 23 years ago, Angel is still in a period of new channel development, and is expected to start contributing to growth in 24 years.
③ Facial implant line revenue is 0.06 million/ +10%, and other revenue is 35 million/ +1266%.
Profit split: The overall level of profit is stable
23. The gross profit margin for the whole year was 95.1% /+0.2pct, of which the gross margin for solutions/gels was 94.5% /+0.25pct and 97.5% /+0.97pct, respectively. The gross margin increased steadily under product structure optimization.
23. The annual sales expense ratio was 9.07% /+0.7pct, the management expense ratio was 5.03% /-1.4pct, and the R&D expense ratio was 8.72% /-0.2pct. The overall cost rate was stable, and the management rate dropped significantly due to a significant drop in service fees and labor costs for the Hong Kong stock listing in '22.
Net interest rate: 23. 64.8% /-0.4pct for the whole year, 63% /+2.6pct for a single Q4. The net interest rate was stable throughout the year. The increase in Q4 was mainly due to the low base in 22Q4 investment income.
Highlight tracking: Channel expansion has achieved significant breakthroughs. Increased penetration of new channels in 24 years will be the main line logic, and Hi Sports is expected to welcome greater flexibility
① Institutional development: By the end of '23, the company had covered about 7,000 medical and aesthetic terminals, an increase of about 2,000 compared to the end of '22, reflecting the positive action of the company's 23Q3 sales team to increase terminal penetration. At the same time, medical and aesthetic terminal development was the main theme of growth in 24. The new channels are expected to provide greater growth flexibility for leading large products.
② Pipeline progress: According to annual reports, injectable botulinum toxin type A, modified sodium hyaluronate gel containing polyvinyl alcohol gel microspheres has entered the registration process; lidocaine butacaine cream and second-generation facial implants are in clinical trials; injectable hyaluronidase, deoxycholic acid, and simeglutide are in the preclinical development stage.
Investment advice: The company's 23H2 successfully completed the equity incentive target during the internal adjustment and expansion period. The increase in medical and aesthetic terminal expansion in 24 years is the main principle. The increase in coverage of new channels is beneficial to the increase in the penetration rate of Hi-Body products. It is expected to usher in greater elasticity in 24 years. In addition, the company has deep pipeline reserves, botulin/collagen/local anesthetic/energy sources/weight loss/skincare, etc. are expected to build the most complete medical and aesthetic matrix puzzle. We have always emphasized that product iteration and new grasping the market direction is the core of American customers One of the competitiveness, the smooth relay of the pipeline also highlights the changing environment Under the circumstances, the management's excellent strategic vision estimated net profit of 24.5, 31.6, and 3.94 billion for 24-26. The corresponding PE was 31/24/19X, maintaining the “Highly Recommended” rating.
Risk warning: major changes in the external macroeconomic environment, relevant national policy adjustments, risk of changes in the market environment