\u3000\u3000 Lushang Health Industry Development Co.Ltd(600223) (600223)
Key investment points
Event: Jia Qingwen, former general manager of Freida, was elected chairman of the company
Mr. Ge Jian no longer served as the chairman and elected Mr. Jia Qingwen as the chairman. Mr. Jia Qingwen has rich medical research background and operation and management experience. This change of command is in line with the company’s strategy of transforming the big health industry. He judges that the company will continue to scale up the big health cause in the future and attaches importance to the layout of cosmetics + medicine.
Former chairman Ge Jian: from October 2021 to now, he has served as the chairman of Lushang and is familiar with the real estate business. Senior engineer, deputy general manager, member of the Party committee and Secretary of the Discipline Inspection Commission of Shandong Ginza shopping center Co., Ltd; Deputy general manager of Lushang group and general manager of Lushang Health Industry Development Co.Ltd(600223) center; Chairman and general manager of Shandong Lushang Group Industrial Investment Co., Ltd; Secretary of the industrial investment branch committee of Shandong Lushang group of the Communist Party of China.
New Chairman Jia Qingwen: former general manager of Freida Pharmaceutical Group, familiar with medicine and cosmetics business. Master of pharmaceutical engineering, Shandong University, chief pharmacist. From January 2014 to January 2019, he served as vice president of Shandong Academy of Pharmaceutical Sciences and director of new drug evaluation center; From January 2019 to January 2021, he served as the general manager of Shandong Furuida Pharmaceutical Group; From March 2019 to now, he has served as the director of Lushang health industry development; From January 2021 to now, he has served as party secretary and vice chairman of Freida Pharmaceutical Group; General manager of Lushang Health Industry Development Co.Ltd(600223) since March 2021.
Lu Shang: the company’s real estate + hyaluronic acid industry chain is driven by two wheels. It is judged that hyaluronic acid will continue to be overweight in the future
Reply: the company transformed from a traditional real estate company and added hyaluronic acid industry chain. Lushang Health Industry Development Co.Ltd(600223) originally a traditional real estate company, it was listed in backdoor st Wanjie in 2008 and set up the elderly care industry in early 2015. In 2018, it began to transform from real estate to health industry by acquiring 100% equity of Shandong Furuida pharmaceutical under Lushang group, and layout the biomedical and cosmetics industries; In 2020, it will complete the acquisition of 60% equity of Shandong focus biology and supplement cosmetics and food grade hyaluronic acid raw materials.
Prospect: Shandong Furuida Pharmaceutical Group takes medicine and cosmetics as its core business, and the prospect is promising. Freida Pharmaceutical Group, a wholly-owned subsidiary of Lushang, is a leader in hyaluronic acid industry in the fields of API, drugs, medical devices, health food, food and cosmetics. 1) Cosmetics business: with 11 brands such as Yilian and Dr. yu’er, it is in the rising period of high income growth + profit improvement. In the first three quarters of 21 years, the operating revenue was 990 million yuan, with a year-on-year increase of 175%. It is expected that the annual cosmetics revenue this year is expected to reach 1.5 billion yuan, of which the revenue of Dr. yu’er / Yilian / other brands is 7-8 / 6-7 / 100 million yuan respectively. 2) Pharmaceutical business: Bausch lunfrida holding 30% and Mingren Frida holding 60.71%. Among them, boslunfrida is the leader of hyaluronic acid ophthalmology and orthopedics in China. There are well-known brands of “runshu” and “Runjie” in ophthalmology. The representative product of orthopedics is “spete”, an injection drug for osteoarthritis.
Profit forecast and Valuation: overweight rating
Based on the company’s steady real estate business and the hyaluronic acid track with high growth and prosperity, the cosmetics business is expected to set sail. We estimate that the revenue from 2021 to 2023 will be 12.95 billion yuan, 16.51 billion yuan and 18.6 billion yuan respectively, with growth rates of – 5%, 27% and 13% respectively; The net profit attributable to the parent company was RMB 750 million, RMB 860 million and RMB 1.21 billion respectively, with a year-on-year growth rate of 17%, 15% and 40% respectively, corresponding to 16, 14 and 10 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.
