\u3000\u3 Guocheng Mining Co.Ltd(000688) 363 Bloomage Biotechnology Corporation Limited(688363) )
Event: in 2022 Q1, the company realized revenue of 1.255 billion yuan, with a 61.57% increase, net profit attributable to parent company of 200 million yuan, with a 31.07% increase, net profit deducted from non attributable to parent company of 183 million yuan, with a 31.21% increase and EPS of 0.42 yuan. The company’s performance growth exceeded expectations and entered a new field of collagen.
Comments:
The functional cosmetics business continued to expand and its performance exceeded expectations. In terms of raw material business, the company has vigorously explored the Chinese market of raw material business internally, upgraded the organizational structure externally, and incorporated some international raw material business into the management of overseas subsidiaries. The medical terminal business has made a major breakthrough, “hailida” has won the bid for centralized procurement in nine provinces and two districts, PrP has promoted sales in multiple departments in China, obtained the online sales qualification of 25 provinces, and its long-term development has continued to improve. In terms of functional skin care products, the four major brands have passed the initial growth period and entered the stage of large-scale. It is worth looking forward to building 3-5 national brands. In the second year of functional food business development, the company continues to grasp market opportunities and pay attention to steady investment, which is expected to continue to contribute to new performance growth points.
The strategic investment continues to deepen, the sales expense rate increases, and the brand voice is expanded. In 2022q1, the company’s comprehensive gross profit margin was 77.13%, down 1.57pct at the same time. Affected by the increase in employee compensation and equity incentive expenses, the company’s sales rate and management expense rate in 2022q1 were 45.12% and 6.25% respectively, with an increase of 1.55pct and 0.81pct. In terms of R & D expense rate, the R & D expense rate of 2022q1 company increased by 1.48pct to 6.49%, mainly because the company strengthened outsourced R & D and increased R & D expense investment. Overall, the net profit margin of the company in 2022q1 decreased by 3.84pct to 15.75%.
Acquire and expand the strategic territory and enter the field of collagen industry. In April 2022, the company acquired 51% equity of Beijing Yierkang Bioengineering Co., Ltd. for 233 million yuan and became the controlling shareholder. The three business segments of the company fully benefited from the acquisition measures. In terms of raw material business, collagen further enriched the raw material matrix, completed the category extension from hyaluronic acid to collagen, and enabled the end of the industrial chain. In terms of medical terminal business, Yierkang’s existing collagen and other products will enrich the company’s pharmaceutical business pipeline, accelerate the meeting of different market needs and further open the market. In terms of consumer terminals, the introduction of collagen raw materials will help the company’s functional skin care products and functional food products to further develop, innovate, iterate and upgrade, and empower the expansion of new product matrix.
Profit forecast and investment rating: the high outlook of the industry continues to be superimposed on the continuous improvement of the company’s brand and product power in the future and the steady progress of the four major businesses. We raised the EPS forecast for 202224 to 2.20/2.93/3.71 yuan (the original value was 2.15/2.86/3.71 yuan). At present, the stock price corresponds to 57 times PE in 22 years. We are optimistic about the company’s long-term focus on R & D and innovation and rely on the six technology platforms of microbial fermentation technology, Continue to launch active substances, enrich and optimize product structure, and with the expansion of collagen field and strong achievement transformation ability, help the rapid development of business in the four sectors, consolidate the dominant position, expand market share and maintain the “buy” rating.
Risk factors: covid-19 epidemic rebounded, new product market acceptance was lower than expected, industry competition intensified, etc.
