Incident: Ma Yinglong released the 2024 semi-annual report. The company achieved revenue of 1.93 billion yuan, an increase of 17.5% over the previous year; achieved net profit of 0.31 billion yuan, an increase of 10.9% over the previous year; and realized net profit after deducting non-return to mother of 0.31 billion yuan, an increase of 38.3% over the previous year.
Hemorrhoid treatment varieties have performed well, and the cultivation of key varieties for health has been accelerated. The parent company of 2024H1 had revenue of 1 billion yuan (+17.5%), of which hemorrhoid treatment products achieved revenue of 0.88 billion yuan (+22%), with impressive performance. The Big Health business followed the trend of domestic products, increased the cultivation of key varieties, and strengthened content marketing. The sales scale of representative products such as eye care products and hygiene wipes series products represented by the Babao Eye Cream series grew rapidly, driving the overall scale growth of Big Health. 2024H1 Health's revenue increased 33.3% year on year.
Profitability continues to improve, and channel inventory management has achieved remarkable results. The gross margin of the 2024H1 company increased to 48.4% (+4.6pp), mainly due to price increases for some products treating hemorrhoids and the obvious growth rate in the pharmaceutical industry sector with high gross margin; in terms of cost ratio, the sales expense ratio of 2024H1 was 23.4% (+1.6pp), mainly due to revenue growth and increased investment in market planning in the big health business; the management expense ratio dropped to 3.3% (-0.1pp), and the cost ratio improved markedly during the period. As of 2024H1, the company's accounts receivable were 0.26 billion yuan (-37.5%) and inventory was 0.292 billion yuan (-14.9%), and the channel inventory management results were obvious.
Medical services continued to be optimized, and the pharmaceutical business achieved restorative growth. Medical services: 2024H1 due to the decline in the scale of the medical service supply chain business, medical service business revenue fell 7.61% year on year; pharmaceutical commerce: in terms of pharmaceutical retail, the company actively responds to changes in industry policies and development trends, enriches the PB (Private Brand, Private Brand Product) product sequence to drive overall revenue growth in the pharmaceutical retail business; in terms of pharmaceutical logistics, optimizing supply chain construction and further enriching variety resources; adjusting the downstream customer structure to increase the number and scale of products supplied. 2024H1 pharmaceutical commercial revenue increased 17% year on year, achieving Restorative growth.
Profit forecast: The company's 2024-2026 EPS is expected to be 1.28 yuan, 1.46 yuan, and 1.65 yuan, respectively, and the corresponding PE is 21 times, 18 times, and 16 times, respectively.
Risk warning: the risk of raw material prices or large fluctuations; the risk of price increases falling short of expectations; competition increases the risk.