Lushang Freda Pharmaceutical (SH:600223) Guoyuan Securities·2024-08-29 07:34Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% compared to the benchmark index [4][10]. Core Insights - The company reported a steady growth in performance for the first half of 2024, with a year-on-year increase of 14% in net profit attributable to the parent company [3]. - The company's revenue for H1 2024 was 1.925 billion yuan, a decrease of 22.15% year-on-year, while the net profit attributable to the parent company was 127 million yuan, down 33.18% year-on-year. However, the net profit excluding non-recurring items increased by 77.19% year-on-year [3]. - The cosmetics segment showed resilience, with revenue of 1.186 billion yuan, a year-on-year increase of 7.24%, and a gross margin of 61.37% [3]. Financial Performance Summary - For H1 2024, the company achieved a gross margin of 51.87%, an increase of 7.7 percentage points year-on-year, while the net profit margin was 8.11%, a decrease of 1.37 percentage points year-on-year [3]. - The cosmetics segment's main brand, Yilian, generated revenue of 447 million yuan, up 14.17% year-on-year, while the Aier Doctor brand achieved revenue of 645 million yuan, up 7.82% year-on-year [3]. - The pharmaceutical segment's revenue was 240 million yuan, down 17.28% year-on-year, with a gross margin of 52.13% [3]. Strategic Development - The company is actively expanding into the medical beauty and hair care sectors, launching new brands such as "KeyC" for medical aesthetics and "Jimu" for scalp care [3]. - The cosmetics division is implementing a "5+N" strategy, focusing on core products and enhancing product lines to drive growth [3]. Earnings Forecast - The company is projected to have earnings per share (EPS) of 0.34, 0.40, and 0.51 yuan for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (P/E) ratios of 18, 15, and 12 times [4].