occurrences
The company achieved revenue of 9.41 billion yuan (+19.7% YoY) and net profit to mother of 1.75 billion yuan (+26% YoY) in 2023. 2023 Q4 revenue was 1.62 billion yuan (-4.5% YoY), net profit attributable to mother was 150 million yuan (-61.1% YoY).
Key points of investment
A new VDS cycle began in 2023, and the main brand “Tomson Beijian” grew steadily in 2023 revenue split: (1) By product: tablets/powders/capsules/others, each achieved revenue of 24.8/13.7/19.6/3.59 billion yuan, -2.5%/+22.1%/+12.6%/+46.6% over the same period last year. Others include gift boxed products and other dosage products such as liquid drinks and gummies. (2) By region: Domestic and overseas reached 79.3/1.47 billion yuan respectively, +18.3%/+27.7% year-on-year. (3) Domestic business sub-brands: Tomson Beijian/Jianliduo/Life-Space achieved revenue of 54.0/11.8/450 million yuan respectively, +21.5%/-2.5%/+46.8% year-on-year. (4) Domestic business sub-channels: Online/offline channel revenue accounted for 41.9%/58.1% of domestic revenue respectively, +27.5%/+12.4% year-on-year respectively. (5) In overseas business: LSG's revenue was 990 million yuan, +23.0% year-on-year. (6) Dealers: The number of domestic/foreign dealers was 938/55 respectively, +2/-12 compared with the previous year. 2023 Q4 revenue split: (1) Domestic business sub-brands: Tomson Beijian/Jianlife/Life-Space achieved revenue of 8.9/18/60 million yuan respectively, -9.8%/-6.2%/+22.0% year-on-year. (2) In overseas business:
LSG's revenue was 220 million yuan, -4.87% YoY.
Online share increased, and cost investment increased slightly
2023 gross profit margin 68.9% (+0.6pct), net profit margin 18.9% (+1.0pct). 2023 sales expenses rate 41.0% (+0.7pct); management expenses rate 5.3% (+0.3pct); R&D expenses rate 1.9% (-0.1pct); financial expenses ratio -0.6% (-0.1pct). 23Q4 gross profit margin 65.2% (-1.3pct), net profit margin -9.3% (-4.1pct). 2023 Q4 sales expense ratio 69.6% (+5.9pct); management expense ratio 8.9% (+5.3pct); R&D expense ratio 3.4% (+0.3pct); financial expense ratio -1.0% (-0.2pct).
Profit forecasting and valuation
We believe that as a leading VDS company, the company will continue to grow steadily in the new cycle of the industry. Revenue for 2024-2026 is expected to be RMB 103.8/114.5/RMB 12.56 billion, up 10.3%, and 9.8%; net profit to mother will be RMB 19.1/20.9/2.30 billion, respectively, up 9.4%, and 10.1%. Maintain a buy rating.
Risk warning
Increased industry competition risk; risk of policy changes; risk of exchange rate fluctuations, etc.