Event description
The company announced that in the third quarter of 2022, the company realized operating income of 605 million yuan, an increase of 55.15% over the same period last year, a net profit of 401 million yuan, an increase of 41.55%, and a non-return net profit of 395 million yuan, an increase of 52.26% over the same period last year.
Event comment
As personal consumption + local consumption + selective consumption, the company's income recovered as scheduled in the third quarter. The company was affected by the epidemic in the second quarter, the growth of the revenue side slowed considerably. Under the background of the easing of the offline epidemic in the third quarter as a whole, the revenue side of the company quickly returned to the eye-catching growth of about 55%. We believe that in addition to the characteristics of medical and beauty consumption itself with local + individual + elective consumption, it is also inseparable from the company's excellent product echelon, and it is expected that the main products are in the high-end series. The high body neck needle continues to grow steadily, while the panda needle is still in the stage of positive cycle of word-of-mouth and institutional coverage, and is expected to contribute to the core increment, under the general trend of water light product compliance. It is expected that the high body water light series will also have a better performance. In addition, the offline recovery in the third quarter has also accelerated the progress of the promotion of new products. In view of the promotion of Angel, the company has adopted a doctor injection license authorization system to combine doctor training with authorization system. Efficient and stable channel construction and perfect learning platform system have brought first-mover advantages for the promotion of new products. At present, Angel has achieved rapid penetration among different types of institutions in first-tier and second-tier cities across the country. The use feedback of doctors and beauty seekers is good. From the third quarter of the single quarter compared with the second quarter, we expect that the proportion of the white angel as a high gross margin product will further increase. The performance of the white angel in the third quarter is expected to be better than that in the second quarter.
The gross profit margin in the third quarter is in the improvement channel reflecting the optimization of the company's product structure, and the year-on-year decline in deducting non-net profit margin is expected to be mainly due to the increase in R & D investment. The company's gross profit margin increased by 0.92% in the third quarter compared with the same period last year, which is higher than that in the second quarter. We expect that the marginal factor lies in the further increase in the proportion of white angel products with high unit prices. The sales expense rate narrowed by 2.07 percentage points compared with the same period last year. It is expected that after the offline recovery, thanks to the substantial growth of the company's revenue end, the input-output ratio of sales expenses has recovered significantly, and the management expense rate has been slightly saved. The R & D expenditure rate increased by 3.84% in a single quarter, which constitutes the main reason why the growth rate of non-net profit of the company is slightly slower than that of the revenue side.
Looking forward to the future, the company is rich in product pipeline reserves, which is expected to consolidate long-term growth. According to the progress disclosed in the company's mid-2022 report, the company's botulism products (completion of phase III clinical enrollment), Lilarutide injection products (completion of phase I clinical trials) and Baodi No. 2 (chin filling) have entered the clinical stage. In addition, the second generation implant line (registration inspection phase), deoxycholic acid injection (preclinical development), lidocaine cream (clinical approval) and sodium hyaluronate lysase for injection (preclinical research) projects are in the preclinical stage, the above reserve products are expected to consolidate long-term growth.
Investment suggestion: with the stricter supervision of the medical and beauty industry, the degree of standardized operation of the industry is expected to continue to improve, the company as the head of compliance business, product echelon orderly cultivation, and the ductility of products continues to enhance, is expected to continue to expand market share. It is estimated that from 2022 to 2024, the company's EPS will be 6.48,9.21 and 12.96 yuan respectively, and the PE will be 72,51 and 36 times respectively, which is already in the low valuation quantile since the company went public, with outstanding allocation value and a "buy" rating.
Risk hint
1. The progress of new product development and registration is not as expected
2. The competition in the industry is intensified and the profit margin is declining.