Jinwu Financial News | According to the CITIC Construction Investment Research Report, Smore International (06969) achieved revenue of 11.168 billion yuan in 2023, -8.0% year over year; realized net profit of 1,645 billion yuan, or -34.5% YoY, with a gross profit margin of 38.8% /-4.5pct. , net profit margin 14.7% /-6.0pct. Looking at a single quarter, 23Q4 achieved revenue of 3.166 billion yuan, -2.3% YoY; realized net profit of 468 million yuan, or -15.2% YoY.
Looking forward to the future, global regulations will become stricter, compliant products will benefit, and atomization technology platforms will continue to invest and accumulate energy for future growth. 1) The domestic market has entered an era of orderly management. In the future, as non-compliant products are cleared and new national standard product capabilities continue to improve, the market is expected to resume healthy growth. 2) Overseas, the FDA is strengthening enforcement every quarter, and the direction of supervision is becoming stricter globally. The bank believes that manufacturers with diversified products and technical reserves and compliant operations, represented by the company, are expected to benefit. 3) In terms of new business, the company has 3 formulations and devices for asthma and COPD approved by European and American drug regulatory agencies. Two respiratory equivalent drugs have achieved experimental bioequivalence in vitro, and future commercialization can be expected.
The bank expects to achieve revenue of 125.22, 14.218, and 16.016 billion yuan in 2024-2026, up 12.1%, 13.5%, and 12.6%; net profit to mother will be 16.82, 19.61, and 2.270 billion yuan respectively, up 2.3%, 16.6%, and 15.7%; corresponding to the latest PE is 24.8x, 21.2x, and 18.4x, respectively. Although the company's 23-year performance was under pressure due to changes in regulatory policies and changes in consumer trends, the company had sufficient cash reserves, focused on the long term, and insisted on R&D investment, channel development, and brand building. The current valuation has declined to a low level, and the bank maintains a “buy” rating.