The company released the 25Q1 financial report, and the performance was in line with market expectations. 25Q1's revenue was 1.08 billion yuan, down 20.8% year on year; net profit to mother was 0.1 billion yuan, down 58.1% year on year. Net profit after deducting non-return to mother was 0.08 billion yuan, a year-on-year decrease of 64.6%. Net profit to mother increased by 0.29 billion yuan in 25Q1 compared to 24Q4, and net profit to mother increased by 0.18 billion yuan after excluding impairment losses. As a result, although the performance was under pressure due to a decline in the dermatological science innovation transformation (skincare) business, it improved month-on-month.
Profitability and operational capabilities are being tested, and we look forward to further changes. 1) Profitability: 25Q1 gross profit margin of 72.2%, a year-on-year decrease of 3.6 pct. Net profit margin was 9.4%, down 8.5pct year over year. 2) Expense side: sales expense ratio 36.6%, up 0.5 pct year on year; management expense ratio 12.5%, up 4.0 pct year on year; R&D cost rate 9.7%, up 2.7 pct year on year. 3) Operating capacity: 25Q1 accounts receivable were 0.52 billion yuan, down 8.5% year on year; inventory was 1.23 billion yuan, up 5.7% year on year; 25Q1 net cash flow from operating activities decreased by 57.828 million yuan, mainly due to reduced operating income and sales repayment in 25Q1.
Focusing on the two major directions of carbohydrate biology and cell biology, the company's third strategic upgrade was underway. The company promotes internal management reforms and gradually solves a number of key operational management issues. The changes will lay a solid foundation for the company's continued development in the future. Although the third strategic upgrade and management change brought short-term performance pressure, in the long run, these measures will bring more room for development for the company. It is expected that the company will continue to adhere to scientific and technological innovation, promote the application of synthetic biotechnology in more fields, optimize the business structure, improve operational efficiency, and ultimately achieve the goal of high-quality development.
The dermatology innovation transformation (skincare) business adheres to three major adjustments. 1) Management structure adjustment: The company's senior management carried out downsizing management, directly taking over the brand and communication management center, as well as the two major brands BM Skin Activity and Miber, focusing their core energy on corporate brand maintenance. 2) Brand upgrade: The BM Muscle Action and Miber brands take the lead in applying cutting-edge global omics research and development technology to reposition the brand and strengthen the brand's technological attributes and competitiveness. 3) Marketing strategy innovation: Stop inefficient marketing activities and build a new brand content system based on technological strength and AI-assisted perception to lay the foundation for healthy growth in financial indicators in the long run, while also accumulating experience and exploring possible paths for subsequent optimization and adjustments for brands such as Runbaiyan and Quadi.
The company is a bioactive substance platform enterprise. It is rooted in synthetic biology research and development advantages and promotes the four branches of raw materials+medical terminals+dermatological science innovation transformation+nutritional science innovation transformation. Maintaining the 25-27 profit forecast, the company's net profit for 25-27 is expected to be 0.45/0.52/0.61 billion yuan, corresponding to PE of 52/45/38 times, respectively, maintaining the “increase” rating.
Risk warning: Competition in the industry has intensified, residents' income expectations have declined, compliance regulations in the medical and aesthetic sector have become stricter, cost control falls short of expectations, management changes have fallen short of expectations, and the progress of research projects has fallen short of expectations.
