\u3000\u3 Guocheng Mining Co.Ltd(000688) 363 Bloomage Biotechnology Corporation Limited(688363) )
Performance summary:
It was announced that in 2022q1, the revenue was 1.25 billion, a year-on-year increase of 61.6%, and the net profit was about 200 million, a year-on-year increase of 31%. The performance is in line with expectations.
During the reporting period, all businesses of the company maintained good growth, and the effect of “four-wheel drive” continued to appear. From January to February, the company’s operating revenue was about 640million, a year-on-year increase of 55%. Based on this calculation, the monthly revenue in March was 610million, a year-on-year increase of 69%. It is expected that during the e-commerce shopping festival in March, the influence of the four major functional skin care brands will continue to increase, and the smooth expansion of new channels such as Tiktok will drive the continuous high growth of revenue (the annual revenue of functional skin care business in 2021 will increase by 147% to 3.32 billion year-on-year); Raw materials and medical terminal business are expected to achieve rapid development with category expansion and internal structure adjustment.
On the cost side, promotion and strategic investment still keep the cost rate high. During the reporting period, the sales expense rate increased by 1.55 percentage points to 45.12% year-on-year, the management expense rate increased by 0.8 percentage points year-on-year due to the expansion of business expansion and the scale of sales personnel, and the R & D investment continued to increase, resulting in the R & D expense rate increased by 1.48 percentage points to 6.49% year-on-year. Generally speaking, the expense rate during the reporting period increased by 3.95 percentage points year-on-year to 57.62%.
Recently, the company purchased 51% equity of Beijing Yierkang Bioengineering Co., Ltd. for 233million yuan. The target company owns two class III medical devices, collagen sponge and artificial bone, as well as many skin care products, such as collagen moisturizing facial mask. This acquisition means that the company’s business line is expanded to the field of collagen, which will not only further enrich the bioactive product line, but also form synergy with the existing technology, so as to further strengthen the industry competitiveness and consolidate the barriers to competition. In addition, the company’s “hydrolyzed zinc hyaluronate” products have passed the filing of cosmetic raw materials, and are expected to contribute to the increment in the future.
Maintain the profit forecast. It is expected that the net profits will be 1.1 billion and 1.4 billion respectively from 2022 to 2023, with a year-on-year increase of 41% and 27% respectively. The EPS will be 2.29 yuan and 2.91 yuan respectively. The current share price corresponds to 50 times and 40 times of PE respectively. Maintain the investment proposal of “interval operation”.
Risk tip: the cost growth is higher than expected, and the product sales are lower than expected
