Description of the event
The company released its 2024 quarterly report. 2024Q1 achieved operating income of 808 million yuan, a year-on-year increase of 28%, achieved net profit of 527 million yuan, a year-on-year increase of 27%, and realized net profit of 528 million yuan without return to mother, an increase of 36.5% over the previous year.
Incident comments
Thanks to product and channel advantages, the company maintained impressive resilient growth in the first quarter. In the first quarter of 2024, the company achieved revenue of 808 million yuan, an increase of 28% over the previous year. It is expected that thanks to channel penetration, product mentality and positioning advantages, the company will still record a growth rate superior to that of the general market of the industry. 2024Q1 gross margin narrowed slightly by 0.7 percentage points year over year. It is expected mainly due to phased changes in product structure. Sales expenses increased year on year, but sales rates declined due to faster revenue growth. The management fee ratio decreased 3.9 percentage points year over year, mainly due to the fact that Hong Kong stock listing expenses were included in the same period last year, and the R&D expense ratio increased slightly year over year. Taken together, the company's operating profitability was greatly optimized in the first quarter.
We believe that going back in time, the company's channel advantage created by big products such as Hi-Tei and Wet White Angel is an important cornerstone for the company to maintain strong growth today. By the end of 2023, the company has established a highly professional sales team with strong execution. The company has more than 400 sales and marketing personnel, covering 31 provinces, cities and autonomous regions, and about 7,000 domestic medical and aesthetic institutions. On the academic side, the company strengthens academic brand building and operates various academic brands such as Quan Xuan Medical Center, Master Master, and Contour Aesthetics Creation Camp. During the reporting period, the company organized a total of 1,753 academic training and conferences, including 337 online meetings and 1,416 offline meetings, covering 22 topics. By strengthening clinical communication and collaboration with downstream medical institutions, innovating surgical research and development, promoting joint treatment, and creating overall solutions, it not only further expands Aimeike's brand influence in medical institutions, but also helps promote the industry to increase its level of specialization.
Looking forward to the future, the company positions a collaborative research pipeline through internal R&D and external cooperation, and has abundant reserves for future growth. In the company's research project, the modified sodium hyaluronate gel with medical polyvinyl alcohol gel microspheres to correct back chin contraction is in the registration reporting stage; injectable type A botulinum toxin to improve interbrow lines is in the registration reporting stage; second-generation facial implants for soft tissue lifting are in clinical trials; lidocaine decaine cream for local anesthesia on the skin before superficial skin surgery in adults is in the clinical trial stage; injectable hyaluronidase to dissolve hyaluronic acid is in the pre-clinical research stage. Furthermore, judging from external cooperation, the company cooperated with Korea's Jeisys in 2023 to enrich the range of medical and aesthetic dermatology products, and cooperated with Beijing Quality Peptide Biotech to introduce simeglutide products.
Investment advice: We believe that at present, the company's Hiti series products have formed a good consumer mentality and will fully benefit from the rising popularity of light medical and aesthetic consumption and the trend of compliance; the influence of the Wet White Angel product brand is gradually increasing, and the combined application of Twin Angel is worth looking forward to. It is expected to become a strong support for the company to build a phenomenal product matrix, and at the same time lay the foundation for long-term growth with a rich pipeline layout for various indications and product categories in the future. The company's EPS is expected to be 11.24, 14.64, and 18.15 yuan in 2024-2026, respectively, maintaining a “buy” rating.
Risk warning
1. Product development and registration risks;
2. The risk of increased market competition.