The company released its 2023 annual report and 2024 quarterly report:
(1) In 2023, the company achieved revenue of 6.076 billion yuan/ -4.45%. Achieved net profit of 593 million yuan/ -38.97%, net profit of non-return to mother of 490 million yuan/ -42.44%, and net operating cash flow of 700 million yuan/ +10.15%.
(2) 2023Q4, the company achieved revenue of 1,854 billion yuan/ -9.04%. Achieved net profit of 78 million yuan/ -73.37%, net profit not attributable to mother of 58 million yuan/ -77.07%, and net operating cash flow of 700 million yuan/ +10.15%.
(2) 2024Q1, the company achieved revenue of 1,361 billion yuan/ +4.24%. Net profit attributable to mother was 243 million yuan/ +21.39%, after deducting net profit not attributable to mother of 231 million yuan/ +53.30%.
The profit side declined, and 24Q1 sales expenses were clearly optimized.
(1) In 2023, the company's gross margin was 73.32%/-3.67pcts, and the sales/management/R&D expenses ratio was 46.78%/8.10%/7.35%, respectively, -1.17pcts/+1.92pct/+1.24pcts.
(2) 2023Q4, the company's gross margin was 73.88%/-2.60pcts, and the sales/management/R&D expenses ratio was 48.52%/9.30%/9.13%, respectively, -1.49pcts/+3.41pct/+3.69pcts.
(3) 2024Q1, the company's gross margin was 75.73% /+1.95pcts, and the sales/management/R&D expenses ratio was 36.04%/8.53%/7.04%, respectively, -10.35pcts/+1.95pct/+0.67pct.
The medical terminal business has grown significantly, and phased adjustments have put pressure on the skincare business.
The raw materials business, pharmaceutical-grade raw materials are growing rapidly. The company's sterile grade HA production line has completed trial production; the medical terminal business covered more than 3,500 new domestic institutions during the reporting period, and the “platelet-rich plasma preparation kit” (PRP) sales growth rate was remarkable; in the functional skincare business, the company made phased adjustments to gradually optimize brand resource allocation and marketing channel structure, and the online direct sales revenue of functional skincare products decreased year-on-year; the functional food business is still in the early stages of consumer education, and the company has taken active measures such as establishing subsidiaries.
Looking ahead to 2024, we are optimistic about the long-term healthy development of platform-based enterprises.
In 2023, the company will continue to consolidate industry-university-research and cooperate closely with universities such as Shandong University and Jiangnan University. The ability to innovate in science and technology was once again recognized, and the Hainan Key Laboratory for Regenerative Medicine Technology and Material Transformation was officially unveiled.
Looking ahead to 2024, the company will continue to focus on synthetic biology in accordance with the strategic direction announced, and build a synthetic biology industry chain company through six major R&D platforms, industrial transformation platforms, and market transformation platforms. In terms of the pharmaceutical business, the company will continue to deeply cultivate the orthopedic market, actively develop and introduce three types of medical devices and pharmaceuticals, and use national procurement policy opportunities in the field of ophthalmology to increase the share of products used in cataract surgery. For the company's four major skincare brands, the company is expected to promote the gradual growth of its brands into national brands by continuously creating large products, promoting refined operation and management, and building a unique consumer mentality to better utilize the advantages of the entire industry chain, intellectual property advantages, and user service advantages.
Investment advice:
Buy-A investment rating, 6-month target price of 74.66 yuan. We expect the company's revenue growth rates from 2024 to 2026 to be 16.0%, 13.9%, and 11.3%, respectively, and the net profit growth rates will be 51.7%, 21.3%, and 12.9%, respectively; given a buy-A investment rating, the target price for 6 months is 74.66 yuan, which is equivalent to a dynamic price-earnings ratio of 40 times that of 2024.
Risk warning: Consumer demand falls short of expectations, market competition intensifies, channel development costs increase, promotion of new brands and products falls short of expectations, etc.