occurrences
[24H1] The company achieved operating income of 1.99 billion yuan (+28.8%); realized net profit of 0.15 billion yuan (+52.7%); realized net profit without deduction of 0.15 billion yuan (+55.5%).
[24Q2] The company achieved operating income of 1.04 billion yuan (+23.3%); realized net profit due to mother 0.09 billion yuan (+27.4%); realized deducted non-net profit of 0.09 billion yuan (+21.2%).
Key points of investment
Revenue: The revenue growth rate of 24H1 gummy and hard capsule dosage forms is impressive. Looking at rapid revenue growth in the American region and other regions by product, 24H1 softgels/tablets/powders/gummies/drinks/hard capsules, other dosage forms/other businesses achieved revenue of 8.9/1.4/1.4/0.1/0.08/0.01 billion yuan, compared to +26.8%/-17.5%/+13.3%/+60.5%/-14.4%/+70.2%/+315.2%/+270.7%; by region, 24H1 China/Europe/America/other regions achieved sales of 8.3/0.29/0.73/0.14 billion yuan respectively, +4.2%/+13.8%/+65.4%/+185.7% year-on-year, with 24H1 BF revenue growth of 56%.
Profitability: According to our estimates, endogenous net interest rate remained flat and high month-on-month. BF is still in the process of improving 24H1's gross profit margin of 32.0% (+2.6pct), net profit margin 6.8% (+1.7pct), and net profit margin of 7.8% (+1.2pct) to mother.
24Q2 The company's gross profit margin was 33.4% (+2.4pct), net profit margin 7.9% (+0.6pct), and net profit margin to mother 8.8% (+0.3pct).
According to our estimates, after deducting 22.59 million of amortization in 24H1, BF actually lost about 42 million, and is expected to reverse the loss at some point in the second half of the year; 24Q2 endogenous net interest rate is estimated to remain flat and high at about 12% month-on-month, and it is expected that the subsequent endogenous net interest rate will remain high.
Expense rate: 24Q2 was more disrupted by one-time expenses. The management fee rate and sales expense ratio increased the 24H1 sales expense ratio by 7.8% (+0.4pct), management fee rate 9.9% (-0.8pct), R&D expense ratio 3.4% (+0.4pct), and financial expense ratio 1.9% (+0.7pct).
24Q2 sales expense ratio 8.0% (+0.6pct), management expense ratio 10.2% (+0.4pct), R&D expense ratio 3.5% (+0.7pct), financial expense ratio 2.2% (+1.4pct).
24Q2 was disrupted by a lot of one-time expenses. The management fee rate and sales expense ratio increased year-on-year. It is expected that along with the reduction in one-time cost interference, the management expenses rate and sales expense ratio will be optimized in the second half of the year.
Profit forecasting and valuation
One sentence recommendation logic: Motivation and employee shareholding goals are firm, and the long-term and short-term logic resonates, and valuation is expected to improve ① Optimistic long-term logic: in the first year of globalization, it is expected to take the lead in increasing the B-side concentration of global nutrition and health food; ② Short logic - fundamentals are inflection point: BF is improved quarterly, and performance flexibility is released as scheduled; ③ High degree of firm implementation of incentives and employee shareholding goals: revenue of no less than 4.312/4.927/5.566 billion yuan, corresponding to the same 24-26 revenue increase of 20.4%/14.2%/14.2%/ 13.0%; employee shareholding performance target of 0.4 billion in 24 years (not excluding employee shareholding expenses), net profit target of about 0.385 billion after exclusion;
The company's revenue for 2024-2026 is estimated to be 4.34, 5.06, and 5.89 billion yuan, respectively, and net profit to mother is 0.4, 0.5, and 0.58 billion yuan, respectively; maintaining the purchase rating.
Risk warning
Increased industry competition risk; risk of policy changes; risk of exchange rate fluctuations; measurement risk bias, etc.