Key points of investment
24Q1 profit was basically in line with the median performance forecast, with a 37% increase after deducting non-net profit.
24Q1: Revenue/net profit attributable to mothers/net profit deducted from non-net profit were 808/5.27/528 million respectively, up 28%/27%/37%. Previously, the company issued a performance forecast, with revenue of $803-826 million, net profit attributable to mother of $51-534 million, and deducted non-net profit of $513-537 million. The actual profit was basically in line with the median forecast.
Profitability: scale effect+marketing system optimization, high net interest rate is basically stable 24Q1: gross margin/net interest rate 94.5%/65.4%, -0.7pp/-0.2pp year over year. Sales/management/R&D expenses were 8.3%/4.1%/7.1%, respectively, -2.1pp/-3.9pp/+0.2pp. Benefiting from the scale effect and optimization of the marketing system, the company's Q1 sales expenses rate declined year-on-year. The obvious decline in management fees is mainly due to the high listing fees for Hong Kong stocks in the same period last year, compounded by the effect of scale.
In the short term, consumption has recovered at a high base in 23Q2, and the 24Q2 growth rate is expected to slow down; however, starting in 24Q3, development is expected to accelerate due to low basis+the release of new products such as Sheng/Bonida (Chin Indication).
Looking at the whole of '24, we expect that the core driver will still come from recycled products: 1) The core product, Wet White Angel, continues to grow and continue to climb; the new product, Like Life Angel, is expected to be officially released, and we are optimistic about its potential for collaborative development with Wet White Angel. 2) As a scarce compliant product, the Hi-Ti 2.5ml/Active Water Light Blue Sea Circuit is expected to continue to increase in market share; 3) The Hi-Ti series follows the recovery in passenger flow in the medical and aesthetic industry and further penetrates into 7,000 medical and aesthetic institutions. 4) In the inventory of various products under development, we expect Bonida (Chin Indication) to be approved in 24; Botox is expected to be approved in around 25 years.
In the medium to long term, the medical and aesthetic market's low penetration and high growth logic remains unchanged. Based on the basic models of the two major star series, Hi-Tei and Regeneration, higher growth requires attention to the continuous expansion of the product matrix boundaries. The penetration rate of medicine and beauty in China is still low, and the core driver for the future will still be the double increase in penetration rate and consumption frequency. As a leading domestic injectable medical and aesthetic company, the company currently maintains a leading position in the field of hyaluronic acid injections and regenerative product injections, and lays the foundation for medium- to long-term growth on blue ocean tracks such as botulinum toxin, weight loss products, and collagen. In '23, the company cooperated with Peptide Biotech to introduce simeglutide and invested 4.89% of its shares; signed a distribution agreement with JEISYSMEDICAL, a leading medical and aesthetic instrument company in Korea, to lay out two high-potential products: high-intensity focused ultrasound instruments (similar products are ultrasound knives) and single-stage radiofrequency instruments (similar products are Thermage), both of which are expected to be launched in 25-27.
Profit forecasting and valuation: The company is in the most bargaining power in the rapidly growing medical and aesthetic industry. As an industry leader with outstanding product scarcity and matrix integrity, Aimeike has great potential and broad scope. We expect net profit from 24-26 to be 23.85/29.72/3,568 billion yuan, an increase of 28%/25%/20% over the same period. The current market value corresponds to PE only 27/22/18 times, maintaining the “buy” rating.
Risk warning: Consumption recovery falls short of expectations; market competition intensifies; new product launch progress falls short of expectations, etc.