[Core Conclusion] The company focuses on large health industry chain clusters with cosmetics as the core, and maintains core advantages in various fields such as hyaluronic acid, skin microecology, and recombinant collagen. The multi-brand omnichannel development strategy injects momentum into performance growth, and future growth can be expected. The company's net profit from 2024 to 2026 is expected to be 0.369/0.455/0.542 billion yuan, which is covered for the first time with a “buy” rating.
[Report Highlights] Based on the advantages of the entire industry chain, the company relies on the scale of the effective skincare market and the high level of recognition of domestic products, strengthens the construction of a differentiated brand matrix, adheres to a refined multi-channel marketing strategy, and is optimistic about the company's long-term potential based on industry prospects, R&D and industrial chain strength, and management and operation strategies.
Focus on the big health industry and accelerate strategic transformation. The company divested the real estate development business in 2023 and completed industrial transformation. The abundant cash on hand brought about by the divestment of the real estate business provided a solid guarantee for resource investment.
In line with the Big Health transformation strategy, the company strengthened the talent introduction mechanism, raised the level of specialization and professionalization of the core management, and at the same time gave the cosmetics and pharmaceutical management team higher authority, and the governance mechanism was further streamlined.
The successful transformation of the company's industrial structure and improved management efficiency are expected to promote continued growth in future profitability.
With the construction of a “5+N” brand matrix, cosmetics are expected to enter a period of accelerated development. Dr. Aier is forwardly positioning the “microecology +” concept, promoting product iteration and new product updates in an orderly manner, and further expanding into the Gaoke Single & Anti-Aging Circuit; Yilian focuses on China's high moisturizing, opens a new “hyaluronic acid +” track, increases the strategy of large single products, and builds a new marketing ecosystem through Dabo + self-broadcast two-wheel drive; Shanyan and Iparhan are expected to grow in high-end precision skincare and oil skincare segments; the new brand KeMi KeyC helps build a new ecosystem for the US and expand the medical beauty scene, and is expected to create new growth songs. line.
The pharmaceutical business is stable, and the profitability of the raw materials sector is expected to improve. Pharmaceutical sector: The products of Dr. Renfreda and Akihito Freda cover various fields such as orthopedics, ophthalmology, pediatrics, etc., and rely on good reputation to help new retail businesses and promote diversified development of the pharmaceutical business. Raw materials sector: Focus on the continuous release of Hyaluronic Acid, the core product of Freda, the sales volume of oral beauty products, and the active expansion of FASP application scenarios. Freda Biotech's new raw materials consolidate its leading edge and develop customized business to help long-term development.
Risk warning: Competition in the industry is intensifying; new product promotion falls short of expectations; policy supervision is getting stricter.