Event: The company released the third quarterly report of 2023, realizing revenue of 6.01 billion yuan from Q1 to Q3, with a decrease of 21.4%; net profit attributable to parent company of 2.148 billion yuan, with an increase of 71.8%; net profit deducted from non-profit of 621 million yuan, with a decrease of 46%. 23Q3 realized revenue of 1.744 billion yuan, down 29.8%; net profit attributable to mother was 1.466 billion yuan, up 310.2%; net profit deducted from non-profit was 71 million yuan, down 78.4% at the same time.
Comments:
Infection protection products drag down the performance of medical business, and the channel and product structure tend to be balanced. 23Q1-Q3 The company's medical business realized revenue of RMB 3.002 billion yuan, down 38.32% year-on-year, mainly affected by the sharp decline in demand for infection protection products. By product, the accumulated revenue of conventional medical consumables products reached RMB 2.178 billion yuan, with an increase of 25.93%, among which the revenue of surgical combination package and health care products is expected to grow rapidly. According to different channels, the proportion of domestic B-end (hospitals and others)/foreign/C-end (e-commerce + pharmacies) revenue is 38.07%/35.45%/26.48% respectively, and the income structure is more balanced and healthy.
Consumer goods business grew steadily and actively promoted brand internationalization. 23Q1-Q3 consumer business realized revenue of 2.96 billion yuan, up 9.22% year-on-year. By product, the sales volume of dry and wet cotton soft towels of core explosive products increased steadily, and the growth rate of adult clothing and other textiles among textiles was relatively good. By channel, the revenue of offline stores increased by double digits, the profitability gradually improved, and the online channel increased by high single digits. In terms of brand building, the company established an overseas business department in August to actively explore Southeast Asia and Europe and America. In October, Zhao Liying was officially announced as the spokesperson of home textile home clothing, further enhancing the brand influence.
Raw material prices and inventory disposal affect gross profit margin in the short term, and the decline in revenue leads to an increase in rates. 23Q1-Q3 The gross profit margin of the company increased from +2.3pcts to 50.2%, which is expected to be mainly due to the increase in the proportion of revenue from consumer business. Sales/management/finance/R & D rates increased from +5.7/+0.9/+0.2/-0.4pcts to 24.1%/7.2%/-1.3%/4.5% respectively, mainly due to lower revenues. During the period, the Company realized an asset disposal income of RMB1.6 billion, mainly from urban renewal and reconstruction projects. Under the combined effect, the net interest rate of non-parent deduction was-4.7pcts to 10.3%. In a single quarter, the gross profit margin of 23Q3 was 47%, compared with-5pcts, mainly due to the rising price of raw material cotton and the inventory cleaning and replacement of epidemic prevention products. net interest rate minus-9.1pcts to 4.1%. Cash flow: Net operating cash flow in the first three quarters decreased by 81.6% to 220 million yuan, which is expected to be mainly affected by the adjustment of the company's credit policy, cancellation of some advance orders and decline in revenue.
Investment suggestion: The adjustment of epidemic prevention demand will make the company's performance fluctuate in the short term, and the brand upward and channel efficiency will drive the long-term growth. Considering that the impairment of epidemic prevention products will have an impact on profit margin, we lower the profit forecast. It is estimated that the net profit of the Company in 23/24/25 will be 23.6/15.6/18.3 billion yuan (original forecast 26.7/16.8/19.7), corresponding to 10/15/12 times of current market value PE, maintaining the "Buy" rating.
Risk hint: consumption recovery is less than expected, overseas inflation continues, and raw material prices fluctuate sharply.