\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 96 Imeik Technology Development Co.Ltd(300896) )
Event: the company released its annual report for 2021. During the reporting period, the company achieved revenue of 1.448 billion yuan, an increase of 104.13%, net profit attributable to the parent company of 958 million yuan, an increase of 117.81%, deduction of non net profit of 914 million yuan, an increase of 115.55%, and EPS of 443 yuan. Driven by the sales of injection products with hi body as the core, the company’s performance increased significantly. In 2021q4, the company realized a revenue / net profit attributable to the parent company of RMB 425 / 249 million, with a year-on-year increase of 73.48% / 66.69%, maintaining a rapid growth rate under the high base.
Comments:
The omni-directional differentiated product matrix promotes the rapid growth of performance. In 2021, the company’s product line achieved overall growth, in which the operating revenue of solution injection products was 1.046 billion yuan, an increase of 133.84%, accounting for 72.25% of the revenue, an increase of 9.18 PCT over the previous year, mainly benefiting from the continuous extension of hi body product line and the continuous penetration of panda needle, the strong demand of consumers for anti-aging and skin rejuvenation products, and the company’s products maintained high growth. Gel products achieved a revenue of 385 million yuan, an increase of 52.80%. In addition, thanks to the industrialization of ppdo facial implant line products, the company’s new market for facial implant line was further opened in 2021, with an annual revenue of 05 million yuan, an increase of 187.68%.
Brand influence brings high gross profit, and optimized cost management drives a significant increase in net profit margin. In 2021, the gross profit margin of the company increased by 1.89pct to 93.7%, mainly due to the wide recognition of the safety and effectiveness of the company’s products, the enhancement of brand influence and the improvement of profitability. From the point of view of products, the gross profit margins of injection products and gel products in 2021 were 93.82%/94.55% and 0.97PCT/2.28PCT respectively. In terms of expense rate, affected by the increase of sales staff salary and sales promotion related expenses, the sales expense rate increased by 0.81 PCT to 10.81% in 2021; Benefiting from the scale effect, the company’s management and R & D expense ratio decreased by 1.66 PCT and 1.65 PCT to 4.47% and 7.07% respectively; The financial expense ratio decreased by 1.57pct to – 3.59% year-on-year, mainly due to the interest settlement in the special account of the company’s raised funds in 2021. Overall, the net profit margin attributable to the parent company increased by 4.15pct to 66.15%.
R & D innovation and channel construction go hand in hand to build the company’s long-term competitive advantage. In terms of R & D, the company continued to maintain high R & D investment in 2021, with a year-on-year increase of 65.54%. The core new product “moistening angel” was approved in June 2021 and completed its commercial listing in the second half of the year, which is expected to accelerate its penetration. In addition, the company continues to promote internal and external R & D cooperation and constantly enrich its product line to improve its long-term competitiveness. A number of products under research are progressing smoothly, which is worth looking forward to. In terms of channels, the differentiated business model of “direct selling first, supplemented by distribution” has rapidly expanded the market share of products. Through the direct selling mode, the company strengthens the b-end service education and the C-end sales transformation. “Quanxuan academy” further improves the company’s marketing network and helps the efficient and rapid promotion of new products. Profit forecast and investment rating:
The high-profile image of the medical beauty industry continues, the company is successfully listed by the white angel, the product matrix will be continuously enriched, and there will be a lot of room for growth in the future. We raised the EPS of 202223 to 6.66/9.76 yuan (the original value was 6.59/9.64 yuan), and the EPS of 2024 is expected to be 13.96 yuan. At present, the share price corresponds to 70 times PE in 22 years. We have long been optimistic about the company’s focus on R & D and innovation, adhere to promoting strategic layout, constantly enrich product lines, and the long-term competitiveness is expected to be further improved. In addition, with differentiated channel mode and perfect marketing layout, The company will continue to consolidate its dominant position, expand its market share and maintain its “buy” rating.
Risk factors: industry policy change risk, product R & D and registration risk, intensified market competition, product safety risk, etc.
