Incident: The company's application for the marketing of topical lidocaine tinocaine cream was accepted
The company announced that the marketing application for CU-30101 (topical lidocaine tinocaine cream) has been accepted by the State Drug Administration. The combination formula of lidocaine and dicaine can achieve rapid and long-lasting anesthetic effects. China's table hemp market is impressive and there is plenty of room for compliance alternatives. The company's lidine dicaine anesthetic cream is progressing rapidly, and it is expected to occupy a new blue ocean in the compliance market for topical anesthetic cream after marketing. The company is deeply involved in pan-dermatological treatment, comprehensive layout of hair products, and deep-building barriers between R&D and consumption. We keep our profit forecast unchanged. We expect the company's net profit to be -0.497/-0.341/-0.17 billion yuan in 2024-2026, corresponding EPS of -1.63/-1.12/-0.56 yuan, and the total market capitalization/R&D expenditure in 2023 is at the average level of comparable companies, maintaining a “buy” rating.
Revenue continued to increase in the first quarter, and cross-border single products reversed losses, highlighting the company's excellent commercialization capabilities
2024Q1 achieved a continued high increase in revenue of approximately 34.1 million yuan (123% increase over the same period). In terms of hair, GMV, the core product in 2024Q1, increased by more than 60% and turned a loss into a profit (not considering employee remuneration); revenue from other hair products has reached 31% of the hair sector (+4pct compared to the full year of 2023), which also showed impressive performance.
In terms of skincare products, 2024Q1 Tmall, Douyin, and Xiaohongshu contributed 49.2%, 33.3%, and 17.4% of revenue respectively. Benefiting from the companies' efforts to expand channels, the share of interest e-commerce (Douyin + Xiaohongshu) increased significantly over the same period last year.
Furthermore, during the 618 campaign, the company's GMV reached 56.2 million yuan (same increase of over 500%), including 21.5 million yuan for hair and 34.7 million yuan for skincare products, highlighting the company's excellent commercial operation capabilities.
Major companies are progressing smoothly in the research pipeline, and the repurchase of shares shows the firm confidence of the company
Commercialization: Jointly with Xiaohongshu's S-level IP “My Ten Health Habits”, we continue to expand the brand's voice.
Research pipeline: Various pipelines are progressing smoothly. Three major products, 4% topical minocycline foam, topical finasteride spray, and lidine dicaine anesthetic cream, are expected to be approved for marketing between 2024H2-2025, further opening up the company's growth space; at the end of June, the company's other major product, “recombinant mutant collagenase” (used to treat under-chin fat accumulation), phase II clinical enrollment was also successfully completed. Furthermore, the company announced a repurchase plan on July 12. As of July 30, it had repurchased 0.5858 million shares, accounting for about 0.19% of the total issued share capital, and the total amount of capital paid was HK$4.2072 million (not including transaction fees), demonstrating the firm confidence of the company.
Risk warning: R&D progress is blocked, sales fall short of expectations, costs are out of control, regulatory changes.