Key points of investment:
The company released the 24Q1 financial report, and the performance was in the middle of the forecast, in line with market expectations. According to the company announcement (same below), 24Q1's revenue was 808 million yuan, up 28.24% year on year; net profit to mother was 527 million yuan, up 27.38% year on year. Net profit after deducting non-return to mother was 528 million yuan, an increase of 36.53% over the previous year.
The gross margin decreased slightly, and the sales expenses and management expenses ratio both fell. 1) Profitability: 24Q1 gross profit margin of 94.55%, a year-on-year decrease of 0.74pct. Net profit margin was 65.35%, down 0.2 pct year over year. 2) Cost side: The sales expense ratio was 8.34%, down 2.08pct year on year; the management expense ratio was 4.07%, down 3.91 pct year on year, mainly due to the large amount of Hong Kong stock listing expenses in the same period last year; the R&D expense ratio was 7.13%, a slight increase of 0.21pct year on year, mainly due to the increase in 24Q1 R&D projects and the increase in various R&D expenses. 3) Operating capacity: 24Q1 accounts receivable of 151 million yuan, up 8.8 pct year on year; inventory was 45 million yuan, up 19.4 pct year on year; net cash flow from 24Q1 operating activities was 537 million yuan, up 25.7% year on year, mainly due to increased sales and increased repayments during the reporting period, and the cash flow situation continued to improve.
Hi Fitness is committed to comprehensive product integration, and the regenerative horizontal expansion category continues to meet segmentation needs.
24Q1 expects the overall growth rate of Hi-Tec products to be 20-30%, achieving high growth under a relatively high base.
At present, Hi Ti has covered more than 7,000 medical and aesthetic institutions across the country, and is one of the most widely covered and sold medical and aesthetic pharmaceutical products in China. In the future, while the company will focus on Hiti price control, it will also focus on linking HiTi products to provide overall facial solutions for end consumers. Among regenerative products, the amount of wet white angel needles is good. At the same time, in response to the needs of regenerating shallow skin, they are extended horizontally like raw angel acupuncture products. The two complement each other and are expected to be linked to old wet white users.
Internal research and external cooperation go hand in hand, and the research pipeline layout is adequate. 1) Cooperate with the Jeisys optoelectronic equipment project in Korea, and is expected to further advance domestic clinical research; 2) Synthropeptide Biology is actively promoting the development of simeglutide; 3) Modified sodium hyaluronate gel with modified polyvinyl alcohol gel microspheres to correct back chin contraction is in the registration reporting stage; 4) injectable type A botulinum toxin for improving eyebrow lines is in the registration reporting stage; 5) Second-generation facial implant lines for soft tissue lifting are in clinical trials; 6) Lactocaine for local anesthesia of adult superficial skin surgery The cream is in clinical trials; 7 ) Injectable hyaluronidase for dissolving hyaluronic acid is in preclinical research.
The company is deeply involved in the domestic medical and aesthetic device market. The company's performance continues to grow with two major single products, Hi-Tei and Wet White Angel. The forward-looking layout of various products such as botulinum toxin and optoelectronic equipment stimulates new momentum for growth. The performance is in line with market expectations. It has a business model with high industry barriers, high circuit potential, and high product profitability. It is optimistic about the strong beta logic of increasing industry penetration in the long term, and is optimistic that the company's new product layout continues to unleash growth momentum in the short to medium term to help increase performance. Maintaining the profit forecast, the net profit for 24-26 is estimated to be 25.1/33.2/4.28 billion yuan, corresponding to PE of 35/27/21 times, maintaining the “buy” rating.
Risk warning: Residents' income expectations are declining; the launch of research projects has been delayed; business qualifications and product registration approvals cannot be renewed on time; competition for medical and aesthetic products is fierce; strict supervision of medical and aesthetic products; and negative public opinion in the medical and aesthetic industry.