The company released its 2023 annual report:
1) Throughout 2023, the company achieved operating income of 2,869 billion yuan/year on year, net profit of 1,888 billion yuan/year on year +47.08%, net profit of not attributable to mother of 1,831 million yuan/year on year +52.95%.
2) In the fourth quarter of a single quarter, the company achieved operating income of 699 million yuan/YoY +55.55%/-1.66% month-on-month, net profit of 440 million yuan/YoY +62.20%/-3.25% month-on-month, net profit of 436 million yuan/YoY +87.73%/-5.65% month-on-month.
3) The profit distribution plan was announced. It is proposed to distribute cash dividends of 23.23 yuan for every 10 shares to all shareholders, with a total estimated total of 500 million yuan, accounting for 26.90% of the net profit due to mother; it is proposed to use the capital reserve to increase the share capital and 4 shares for every 10 shares to all shareholders, totaling 86.777 million shares. There will be no bonus shares at this time.
Profitability continues to be strengthened, and management efficiency has improved markedly:
1) For the whole of 2023, the company's net profit margin was 64.77% /-0.40pct, gross profit margin 95.09% /+0.25pct, sales expenses ratio 9.07% /+0.68pct, management expenses ratio 5.03% /-1.44pcts, R&D expenses rate 8.72% /-0.21pct. The increase in gross margin was mainly due to changes in product structure, and the reduction in management fee ratios was partly affected by the reduction in Hong Kong stock listing fees.
2) In the fourth quarter of a year, the company's net interest rate was 62.97% /YoY +2.58pcts/month-on-month -1.03pcts, gross profit margin 94.45% /YoY -1.18pcts/month-on-month -0.62pcts, sales expense ratio 6.90% /YoY +0.45pcs/month-on-month -2.00pcts, management expense ratio 4.62% /YoY -9.49pcts/month-on-month +0.16pcts, R&D expense ratio 12.97% /YoY +0.06pcts/month-on-month +5.21pcts.
The product matrix continues to be enriched, and the product influence continues to grow:
By product, 1) Revenue of solution injection products was 1,671 million yuan/ +29.22%, accounting for 58.22%, and the channel penetration rate continued to increase; 2) Revenue of gel injection products was 1,158 billion yuan/ +81.43%, accounting for 40.35%. Wet White Angel's reputation was recognized downstream and maintained strong growth; 3) facial implantation line revenue was 59 million yuan/ +10.06%, accounting for 0.21%; 4) Other revenue of 0.35 million yuan/ +1265.80%, accounting for 1.80% 22%
The company continues to expand its differentiated product matrix, lay out the field of weight management, introduce simeglutide and acquire 4.89% of its shares in cooperation with peptidebio, and has cooperated with Jeisys Korea to exclusively represent Density and LinearZ non-invasive skin anti-aging instruments in China.
Looking to the future, we believe that the company has a wealth of research projects. It is worth looking forward to the modified sodium hyaluronate gel gel with polyvinyl alcohol gel microspheres to correct back chin contraction, and injectable type A botulinum toxin products to improve lines between the eyebrows.
Investment advice:
Buy-A investment rating, 6-month target price of 414.79 yuan. We expect the company's revenue growth rates from 2024 to 2026 to be 37.5%, 34.8%, and 33.2%, respectively, and net profit growth rates of 30.5%, 34.7%, and 32.7%, respectively; given a buy-A investment rating, the target price for 6 months is 414.79 yuan, which is equivalent to a dynamic price-earnings ratio of 37 times that of 2024.
Risk warning: Market competition intensifies, promotion of new products falls short of expectations, approval progress of products under development falls short of expectations, etc.