\u3000\u3 Guocheng Mining Co.Ltd(000688) 363 Bloomage Biotechnology Corporation Limited(688363) )
Events
The company disclosed the annual report of 2021. In 2021, the company achieved a revenue of 4.95 billion yuan (YoY + 87.9%), a net profit attributable to the parent company of 780 million yuan (YoY + 21.1%), and a basic earnings per share of 1.63 yuan / share.
Functional skin care products continued to increase, and the matrix of four major brands was formed
The company’s revenue from functional skin care products was 3.32 billion yuan (YoY + 146.6%), including 1.23 billion yuan (YoY + 117.4%), 980 million yuan (YoY + 150.2%), 200 million yuan (YoY + 111.1%) and 430 million yuan (YoY + 286.2%) from runbaiyan, kuadi, mibeier and BM. For the first time, the annual revenue of runbaiyan single brand has exceeded 1 billion, the company’s four brands have been formed, and the growth ceiling of functional skin care business has been further opened. The company deepens the differentiation strategy of the four major brands and attaches great importance to the creation of star large items. Runbaiyan has deeply explored the efficacy of hyaluronic acid and established the anti-aging brand image of kuadi. Mibel has gradually become a representative brand of sensitive muscle repair. Muscle activity takes “fermentation” and “control” technology as the technical basis. In 2021, the top four brands built their core explosive products (Star products) and derivative series, including the barrier repair of run Bai Yan, the secondary throwing series of BM, the brown rice series of muscle activity, the powder water of Michell and the blue bandage mask. Meanwhile, the company gradually diversified channels, tiktok platform accounted for 17%, increased 14pct; Offline runbaiyan opened 3 physical stores, and kwadi developed more than 200 offline franchise stores, opening the first year of offline layout.
Ha raw material business grew steadily, and other bioactive substances continued to be introduced
The company’s raw material business achieved revenue of 910 million yuan (YoY + 28.6%), and the revenue of pharmaceutical grade, cosmetic grade and food grade HA was 250 million yuan (YoY + 15.8%), 390 million yuan (YoY + 16.0%) and 110 million yuan (YoY + 36.9%) respectively. With the advantages of fermentation technology, product quality, qualification certification and production scale, the company has strong competitiveness in the industry, and the HA raw material business has grown steadily. The production equipment in Tianjin plant has started commissioning one after another. It is expected to increase the production capacity of 300 tons of hyaluronic acid, which is expected to further improve the market share. At the same time, the company actively launched γ- Aminobutyric acid, sodium polyglutinate, etodyne, ergotriene and other bioactive raw materials will achieve a revenue of 154 million yuan (YoY + 120.3%) in 2021, and bioactive platform enterprises will be further formed.
In the first year of the strategic upgrading of medical beauty business, the layout of product pipelines was improved
In 2021, as the first year of strategic upgrading of the company’s medical and American business, the medical terminal business achieved a revenue of 700 million yuan (YoY + 21.5%). The company focuses on product differentiation advantages of micro crosslinking. The largest single product “Royal age twin needle” has sold more than 250 thousand sales in 2021, and the new product has been listed for half a year to become the first explosive product of “brand”. At the same time, the company improved the product pipeline layout, and provided consumers with “one-stop” medical beauty solutions through the multi field whole process layout of Shuiguang, hyaluronic acid filling, recycled materials, repair products and medical beauty equipment. (1) Deep cultivation of hyaluronic acid products. At the end of 2021, the company launched the double intersection product “Runzhi No. 5”, which is suitable for deep injection and has the advantages of strong support and long maintenance time. Meanwhile, the clinical trials of two single-phase hyaluronic acid products under development are about to be completed and are expected to be approved in 2022. (2) In terms of collagen and recycled materials, the company has completed key technological breakthroughs in self-developed collagen raw materials, and synchronized the development of collagen end products. (3) In terms of medical and beauty auxiliary products, as of January 2022, the company has approved 4 medical dressings of class II medical devices. (4) In terms of medical and beauty equipment products, as of December 2021, the company has been approved as category II medical device water light equipment, which can be used with a variety of injection products of the company.
Sales investment increased significantly and profitability weakened slightly
Due to the adjustment of accounting standards, the freight is adjusted to operating cost accounting, and the gross profit margin of the company is 3.3pct lower than that in 2020. Excluding the impact of freight and equity incentive fees, the gross profit margin was 80.8%, basically the same as 81.4% of the previous year. The net profit margin of the company decreased by 8.8pct, mainly due to the increase of sales and R & D expenses. In terms of marketing, in order to create the brand image of functional skin care products and maintain the exposure of the store, the promotion cost increased significantly, driving the sales cost rate of the company to increase by 7.5pct. In terms of R & D, the company adheres to the close linkage of “industry, University and research” and actively promotes the transformation of scientific research achievements. In 2021, the number of R & D projects of the company reached 239, and continues to expand cooperation with universities and well-known hospitals outside China. The cost of outsourced R & D and cooperative R & D increased by 118.5% year-on-year.
Investment advice
Relying on two major technology platforms, the company has multi-point layout of HA business and built a four-wheel business driving pattern of “raw materials + terminal + skin care + food”. The leading position of raw materials business is stable, the growth certainty of medical and American terminals is strong, the marketing investment drives the high growth of functional skin care business, and the potential market space of functional food is large. It is estimated that the company’s EPS from 2022 to 2024 will be 2.18/2.84/3.52 yuan / share respectively, corresponding to 52, 40 and 33 times of the current share price PE respectively. Maintain the “buy” rating.
Risk tips
The competition of HA raw materials intensifies the risk; The risk that the sales of Runzhi and other medical and American end products are less than expected; The skin care industry is highly competitive, and the brand construction is less than expected; The progress of functional food market education is less than expected.
