Incidents:
The company released its 2025 quarterly report. 1Q2025 achieved revenue of 1.08 billion yuan, -20.8% year-on-year, and realized net profit to mother of 0.1 billion yuan, or -58.1% year-on-year.
Reviews:
The dermatology innovation and transformation business is still in the adjustment period, and the first quarter results are under pressure: the company's raw materials and medical terminal business revenue continued to grow in the first quarter, and R&D, registration and marketization of new pipelines for bioactive ingredients and medical terminals accelerated, but the dermatology innovation and transformation business was still in an adjustment cycle, dragging down overall performance.
Gross margin declined slightly year-on-year, management changes+long-term strategic investment, and the cost ratio increased year-on-year:
1Q2025, the company's gross margin was 72.2%, -3.6 pcts year on year; the company's net margin to mother was 9.5%, -8.4 pcts year over year.
1Q2025, the company's cost rate for the period was 58.4%, +7.1pcts year on year. Among them, sales, management, R&D and financial expenses rates were 36.6%/12.5%/9.7%/-0.4%, respectively, +0.5/+4.0/+2.7/-0.1 pcts year on year, respectively. We believe that the main reason for the increase in the management expense ratio is the increase in related expenses due to management changes and long-term strategic capacity layout.
The first three-type “facial skin improvement” water glow product in China was approved, further enriching the company's medical and aesthetic product matrix: the domestic water light needle market is growing rapidly, and the market size is expected to exceed 20 billion yuan in 2025, but compliance documents in the domestic water light market are currently scarce. The three types of water gloss “moisturizer glass glass” approved by the company this time are the first water glow product in China with clear “facial skin quality improvement indications”. It targets pain points such as the short effect of traditional water glow products and the discomfort of injections. Cain fusion for efficient hydration The comfort of use is expected to open up new growth space with advantages of differentiation and compliance.
Platform-based enterprises in the entire industry chain maintain a “buy” rating: We basically maintain the company's net profit forecast for 2025-2027 at 0.467/0.668/0.91 billion yuan. The current stock price corresponds to 2025/2027 PE 49/34/25 times, respectively. We are strongly optimistic that after experiencing a painful period of management change, the company will maintain a “buy” rating by relying on solid R&D strength and product layout to unleash the development potential.
Risk warning: the risk that the company's business changes fall short of expectations, increased industry competition, and the risk of changes in industry policies.
