\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 223 Lushang Health Industry Development Co.Ltd(600223) )
Performance overview: the year-on-year revenue of 21 years was – 9.2%, and the year-on-year net profit attributable to the parent company was – 43.3%
Cosmetics increased sharply and real estate impairment dragged down net profit. 1) Revenue: the revenue of 21 years was 12.36 billion yuan (- 9.2% YoY), which was mainly due to the decrease of real estate project settlement, resulting in the year-on-year decrease of 18.4% in real estate revenue. 2) Net profit: the net profit attributable to the parent company is 360 million yuan (- 43.3% YoY), which is mainly due to the decline in the price of development products and the increase of bad debts. The asset impairment loss is 200 million yuan and the credit impairment loss is 100 million yuan. 3) Deduction of non profit: deduction of non parent net profit of 360 million yuan (- 42.4% YoY). Among them, Q4 achieved a revenue of 6.01 billion yuan in a single quarter (- 8.6% YoY); The net profit attributable to the parent company was – 140 million yuan (- 162.5% YoY).
Profit: the business structure is optimized, the proportion of biomedical sector is increased, and the cost rate structure is adjusted accordingly
The proportion of high gross profit biomedical sector increased, and the gross profit margin and marketing expense rate increased. 1) Gross profit margin: in 21 years, the gross profit margin of the company reached 25.7% (year-on-year + 5.4pp), the main business structure was optimized, and the proportion of high gross profit biomedical sector represented by cosmetics increased. 2) Expense rate: the sales expense rate of 21 years was 10.1% (year-on-year + 3.9pp), mainly due to the high marketing expense rate of cosmetics and pharmaceutical business, the management expense rate was 3.1% (year-on-year + 0.7pp), and the R & D expense rate was 1.0% (year-on-year + 0.4pp). Overall, the period expense rate was 14.9%, with a year-on-year increase of 5.2pp. 3) Net interest rate: the net interest rate for 21 years is 3.2% (year-on-year – 1.5pp).
Business: strong growth in the biomedical sector has accelerated the transformation of the company
The biopharmaceutical sector continued to make efforts, with outstanding performance in cosmetics and raw materials business. In the past 21 years, Freida Pharmaceutical Group (mainly engaged in the biomedical sector, with a combined caliber) contributed a revenue of 2.18 billion yuan, an increase of 8% year-on-year; The net profit attributable to the parent company was 180 million yuan, with a year-on-year increase of 33%, including:
1) cosmetics: the revenue was 1.49 billion yuan, a year-on-year increase of 117.0%. Mainly relying on Freida Jinyu Bio-Technology Co.Ltd(600201) Jinyu Bio-Technology Co.Ltd(600201) (main cosmetics business), the company realized a net profit of 170million yuan. The company has 11 brands, including Yilian, which is positioned for hyaluronic acid skin care, and Dr. yu’er, which is positioned for micro ecological skin care. In 21 years, Dr. yu’er / Yilian entered a rising period of high income growth + profit improvement, realizing sales revenue of 740 / 650 million yuan respectively, with a year-on-year increase of 272% / 73%.
The gross profit margin reached 63.7%, with a year-on-year increase of 4.5pp, mainly due to the improvement of product quality and proper cost control, which promoted the double increase of profits.
Products: facial mask, probiotic essence, banana mask, probiotics and water emulsion are successfully built to promote high income, four largest single product sales account for 70%, essence and water emulsion explosive products are expected to promote customer unit price increase. Channel: the company withdrew from some offline traditional supermarkets, and while expanding offline sales modes such as direct stores and franchise stores, the company deeply cultivated the online live track. In the past 21 years, the proportion of Dr. yu’er / Yilian online reached 98.0% / 96.2% respectively.
R & D: the company has been developing steadily, and over the past 21 years, we have developed over 160 new products, such as the cream of the essence, anti gravity milk, and so on. Among them, 84 of the independent brands have been listed, and 40 more are upgraded.
Capacity: with the completion and expansion of 35 cosmetics production lines in the first phase of Zhimei science and Technology Innovation Park, a new cosmetics factory in 21 years, the annual output value of the company’s cosmetics will increase by more than 4 billion yuan to ensure the capacity expansion demand of its cosmetics business in the next 3-5 years.
2) medicine: the revenue was 540 million yuan, a year-on-year increase of 9%. It is mainly composed of Bausch lunfrida with 30% shares and Mingren Frida with 60.71% shares. Among them, Bausch lunfrida focuses on orthopedic products, with a 21-year revenue / net profit of 750 / 240 million, a year-on-year increase of 14% / 14%, contributing an investment income of 69.3 million yuan. Based on Chinese patent medicine, Mingren Frida has achieved a net profit of 21.94 million yuan in 21 years, corresponding to a net profit attributable to the parent of 13.32 million yuan. In addition, while continuously promoting the research and development of new products, Mingren furida, a holding subsidiary, has actively arranged functional foods of traditional Chinese medicine + new functional factors. In 21 years, 24 new health products have been approved, and 14 “traditional Chinese medicine +” functional foods have been produced.
The gross profit margin reached 57.9%, a year-on-year decrease of 3.8pp, mainly due to the rise in raw materials and labor costs. In the future, with the further promotion of drug centralized purchase policy, the company is expected to save procurement costs and improve the profitability of pharmaceutical business.
3) raw materials and additives business: the revenue reached 240 million yuan, with a year-on-year increase of 22%. It is mainly composed of focus Freda and Freda biotechnology with a shareholding of 60.11%. In the 21st year, the company launched a new brand of raw material business and three new products of Baifu cosmetic grade hyaluronic acid, Baifu huanhuo small molecule and Baifu ergot thioin. In addition, four raw material products such as ekdoin were newly developed and put into operation γ- Aminobutyric acid.
The gross profit margin reached 37.1%, a year-on-year decrease of 9.5pp, mainly due to product price adjustment. In the future, on the raw material side, the company will focus on promoting the application of food grade sodium hyaluronate raw materials, and continue to launch functional food products around “hyaluronic acid +”, so as to improve the added value of the company’s raw materials and improve the profitability of the raw material side.
The real estate business did not meet expectations and performed poorly due to the downturn of the industry. Since November 21, the real estate market has declined significantly, the sales price has declined and the settlement income has decreased. Under the influence of the industry, the pressure of the company’s inventory decontamination increased, and the company’s real estate business realized an operating revenue of 9.7 billion yuan, a year-on-year decrease of – 18.4%. In the future, we hope to optimize the marketing model, deeply tap customer resources, improve the speed of inventory removal and increase the income of real estate business.
Profit forecast and Valuation:
For the hyaluronic acid track with high growth and prosperity, it is expected that the raw material + cosmetics business will set sail. We estimate that the revenue from 2022 to 2024 will be 12.77 billion yuan, 12.49 billion yuan and 12.87 billion yuan respectively, with growth rates of 3.3%, – 2.2% and 3% respectively; The net profit attributable to the parent company was 630 million yuan, 710 million yuan and 810 million yuan respectively, with a year-on-year growth rate of 75%, 12% and 15% respectively, corresponding to 17, 15 and 13 times of PE, maintaining the overweight rating.
Risk tips
Real estate and biomedical policy change risk, hyaluronic acid raw material price fluctuation risk, cosmetics market competition risk, multi industry integration risk of the company, etc.
