Matters:

The company's revenue in the third quarter of 2024 was 1.064 billion yuan, YOY-7%; The net profit attributable to the parent company was 20 million yuan, YOY-77%; net profit of 11 million yuan, yoy-85%. The company achieved revenue of 3.875 billion yuan in the first three quarters of 24 years, YOY -8%; net profit attributable to the parent company was 360 million yuan, YOY-29.6%; net profit after deducting non-attributable to the parent company was 327 million yuan, YOY-24.6%.

Comments:

Restructuring of cosmetics organization to explore new synthetic biological ingredients. According to Tonglian data, the total GMV of 3Q Bloomage Biotech's main brands in Taotian and Douyin changed year-on-year: Runbaiyan -33%/Quadi -6%/Muscle Active -16%/Medrepair -43%. We believe that the company's accumulation of R&D achievements in the field of synthetic biology and regenerative medicine will help explore the trend of new ingredients in cosmetics. Before Double 11, the company launched new products based on regenerative medicine, cell regulation mechanism and self-repair ability: 1) Runbaiyan Firming Cream, adding Bloomcell, which is specialized in the research of Bloomage regenerative medicine team, 40 kinds of components to maintain human cell energy are compounded into a golden ratio, and the product focuses on improving collagen self-generation and increasing the basement membrane area; 2) Quadi CT50 Anti-Collapse Cream, focusing on the homology research and development of the cinema "Silka Kinetic Element", focusing on expanding and filling the inner core energy, rejuvenating cells, positioning the dermis to resist collapse, and linking collagen gaps; 3) In September, its Quadi brand launched "Mechanical Brand" medical dressing products, including three series of products: "Green Cross Series" skin repair dressing, "Blue Cross Series" medical sodium hyaluronate repair patch and repair solution, and "Red Cross Series" medical type III humanized collagen repair patch and repair solution.

The medical aesthetic business continued to add new products and enriched the product pipeline and terminal layout. In July 24, the company's Runzhi Gege Needle was officially approved, the product is self-developed by the company for the treatment of neck wrinkles, using Bloomage Biotech's MoPA self-crosslinking technology, through molecular physical adhesion and self-crosslinking, to improve the stability and durability of hyaluronic acid.

In October 24, the company released Moisturizer, Positioning Lip Beautification Modification. According to the company's medical terminal revenue in the first half of 24 years, it was 740 million yuan, YOY +52%, contributing 26.5% of revenue; In the third quarter, we estimate that the 1-3Q medical aesthetic terminal will continue to grow.

The gross profit margin increased year-on-year, the sales expense ratio was optimized year-on-year, and the company continued to increase research and development. In 24 years 3Q, the company's gross profit margin was 72.4%, +1.2pct year-on-year/-1.0pct month-on-month, and the company was less able to maintain the year-on-year growth of gross profit margin and maintain the price band among domestic cosmetics, the sales expense rate was 42.5%, -3.1pct year-on-year/-4.9pct month-on-month, and the sales expense ratio was optimized and narrowed, and the management expense rate was 16.6%, +6.6pct year-on-year/+7.6pct month-on-month; The R&D expense ratio was 10.6%, +2.7 pct YoY/+3.4 pct QoQ.

Investment suggestion: Considering that the organizational structure of the company's cosmetics sector is still being adjusted and the online competition in cosmetics is becoming more and more fierce, we downgrade the company's revenue in 24-26 to 57.11/60.90/6.849 billion yuan (the previous value is 66.5/75.9/8.90 billion yuan), and the net profit attributable to the parent company in 24-26 years is forecast to be 5.86/6.95/818 million yuan (the previous value is 8.5/10.6/1.28 billion yuan), and the corresponding PE of the current market value is 50X/ 42X/35X, maintaining the "Recommended" rating.

Risk warning: online cosmetics competition exceeds expectations, and the progress of the company's organizational change is lower than expected;