Lushang Health Industry Development Co.Ltd(600223) (600223)
Event: Shandong Furuida Jinyu Bio-Technology Co.Ltd(600201) Co., Ltd., a wholly-owned subsidiary of the company, was publicly listed for capital increase and share expansion on September 24, 2021. It plans to introduce war investment. The newly increased share capital accounts for no more than 17.58% of the share capital after capital increase, of which war investment subscription is no more than 16.90%; On November 24, 2021, we received the notice on the announcement results of capital increase listing, and determined that the investor is the purchasing entity jointly composed of five companies: Guangxi Tencent, Nantong Zhaohua, Hangzhou zhongdayuan, Jinan kinetic energy Jiafu and Shanghai Zhongyuan, and paid a deposit of 73.824 million yuan.
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The introduction of war investment is about to land, and the advantages of marketing, channels and other resources help the cosmetics business take off. The intended investors are the joint purchasers of five companies, namely Guangxi Tencent Venture Capital Co., Ltd Nantong Zhaohua No. 2 emerging industry investment fund partnership (limited partnership), Hangzhou zhongdayuan enterprise management partnership (limited partnership), Jinan kinetic energy Jiafu investment partnership (limited partnership) and Shanghai Zhongyuan No. 2 private investment fund partnership (limited partnership) intend to subscribe for Shandong Furuida Jinyu Bio-Technology Co.Ltd(600201) The equity ratio shall not exceed 16.90% after the capital increase. At present, the transaction is in the confirmation stage of interested parties. The company will determine whether there is a cross-linking relationship and concerted action relationship between the participants, which is expected to be implemented as soon as possible. According to the enterprise investigation, The joint purchasers may be China Merchants (Nantong Zhaohua), Tencent (Guangxi Tencent), Hangzhou Onechance Tech Corp(300792) (Hangzhou zhongdayuan) and Shandong Provincial Department of finance (Jinan kinetic energy Jiafu) and other investors have good Internet and new media operation advantages, rich channels and marketing resources, which are expected to empower the cosmetics business, optimize the governance structure and help the rapid development of the cosmetics business.
Track bonus + strong R & D endorsement, cosmetics business development can be expected. Yilian, a subsidiary of the company, focuses on hyaluronic acid skin care. With the help of more than 30 years of hyaluronic acid R & D strength of Freida medicine, the company continuously upgrades its products, grabs the hot ingredients in the market, extends its product series and quickly occupies the market; Dr. yu’er has become a rookie in the field of functional skin care, with a good growth momentum through the joint development of multiple platforms. According to Frost & Sullivan data, the company’s subdivided industry has a compound growth rate of 26% in 16-20 years. Backed by the strong R & D endorsement of Freida medicine, the innovation of core components and the continuous promotion of new products can be expected. Relying on the track dividend and strong R & D background, the cosmetics business in the future is expected to go to a higher level with the help of war investment.
The real estate and raw material businesses have their own advantages, and the medical beauty business is under layout. In terms of real estate business, the marginal change of real estate bond financing + relaxation of sales restriction policy, and the company’s real estate accounts for the main profit, which is expected to benefit from the recovery of marginal changes in industrial policies; At the same time, the property service area of the company is growing rapidly, and it is expected that Hong Kong stocks will be listed independently. In terms of raw material business, the company has sufficient production capacity of hyaluronic acid raw materials and is actively applying for the sales qualification of pharmaceutical grade sodium hyaluronate. With the cost-effective price strategy, the share is expected to continue to increase. In terms of medical beauty business, the company has begun to develop three kinds of hyaluronic acid injection products, cooperate in research and development of collagen products, and layout a class of spray and dressing products for medical devices, which is expected to gain a certain share in the medical and American market.
Profit forecast and investment rating: we maintain the company’s profit forecast. It is estimated that the company’s revenue from 2021 to 2023 will be 12.6 billion yuan / 13.57 billion yuan / 14.61 billion yuan respectively, with a year-on-year growth rate of – 7.5% / 7.7% / 7.7% respectively, and the net profit attributable to the parent company will be 750 million yuan / 890 million yuan / 1.06 billion yuan respectively, with corresponding valuations of 19.8 times, 16.7 times and 14.1 times respectively. We believe that the company’s introduction of war investment will empower the cosmetics business in terms of marketing and channel resources and help the rapid development of the cosmetics business. At the same time, the real estate, raw material medicine and other businesses have their own points of view, continue to be optimistic about the company’s future development and maintain the “buy” rating.
Risk factors: the growth of cosmetics business is less than expected; The increase of online traffic cost affects the profit margin; Affected by policies and other factors, the real estate business has the risk of decline.
