Incident Overview
The company released its report for the first quarter of 2024. 24Q1 achieved revenue of 808 million yuan, +28.24% year over year; net profit to mother of 527 million yuan, +27.38% year over year; net profit without return to mother of 528 million yuan, +36.53% year over year.
Analysis and judgment
Profitability remains steady. 24Q1's gross margin was 94.55%, -0.74pcts year on year; net margin was 65.35%, -0.19pcts year on year. On the cost side, the company's sales expense ratio was 8.34%, -2.07 pcts year on year; management expense ratio was 4.07%, -3.92 pcts year on year; R&D expenses rate was 7.13%, +0.21pcts year on year.
Hi, my body has maintained a relatively rapid growth rate, and Wet White Angel continues to lose weight. In 2023, solution injection products with Hi-Body as the core achieved revenue of 1,671 billion yuan, +29.22%. After long-term clinical verification, the safety and efficacy of “Hi Body” was fully recognized by downstream medical institutions and end consumers. The brand value is increasing, and product sales are steadily increasing. In 2023, gel injection products achieved revenue of 1,158 billion yuan, +81.43%; Wubai Angel continued its good growth trend. In 2023, the company continued to adopt a doctor certification system, combining training and certification systems to help Wubai Angel penetrate rapidly across the country and among different types of institutions.
The product matrix under development is rich, and we look forward to seeing more new products launch soon. According to the company's 23 annual report, in the research project, modified sodium hyaluronate gel with modified polyvinyl alcohol gel microspheres to correct back chin contraction is in the registration reporting stage; injectable type A botulinum toxin to improve lines between eyebrows is in the registration reporting stage; second-generation facial implants for soft tissue lifting are in clinical trials; lidocaine butacaine cream for local anesthesia on the skin before superficial skin surgery in adults is in clinical trials; injectable hyaluronidase to dissolve hyaluronic acid is in the pre-clinical research stage. The company's weight management product line continues to advance. Liraglutide injections have completed phase I clinical trials, and simeglutide injections and deoxycholic acid injections are in the pre-clinical stage. Furthermore, the company cooperated with Korea's Jeisys to introduce two non-invasive skin anti-aging devices already commercialized in Korea into the country, which will achieve a breakthrough in the company's energy source equipment pipeline.
Investment advice
We expect the company to achieve revenue of 39.54/51.66/ 6.525 billion yuan in 2024-2026, +37.80%, +30.64%, and +26.31% year-on-year; net profit to mother will be 25.11/32.48/4.119 billion yuan, respectively, +35.09%, +29.37%, and +26.83% year-on-year. EPS was 11.60/15.01/19.04, and the corresponding PE was 26/20/16 times, respectively, maintaining the “buy” rating.
Risk warning
Risks such as industry policy changes; increased competition in the industry; new product sales falling short of expectations; product development and launch results falling short of expectations.