SIRIO(300791) 国海证券·2024-10-11 03:00Investment Rating - Buy rating maintained for the company [1] Core Views - The company is a global leader in the nutrition and health food CDMO sector, with a strong focus on both R&D and manufacturing, and a global presence in both domestic and overseas markets [1] - The company has shown strong performance relative to the CSI 300 index, with a 54.8% increase over the past 12 months [1] - The global health supplement market is highly resilient, with a CAGR of 6.5% from 2020 to 2023, and China's market growing at a higher rate of 7.0% during the same period [2] - The company's revenue has grown from RMB 1.58 billion in 2019 to RMB 3.58 billion in 2023, with a CAGR of 22.72%, and net profit has grown from RMB 143 million to RMB 281 million, with a CAGR of 18.50% [3] - The company's overseas revenue has been increasing, with 2023 revenue distribution at 51.67% in China, 14.77% in Europe, 29.15% in the Americas, and 4.41% in other regions [3] Company Overview - The company was founded in 1993 as a pharmaceutical company and transitioned to the nutrition and health food CDMO sector in 2000 [3] - It has expanded globally through strategic acquisitions, including Ayanda in Germany in 2016 and Best Formulations in North America in 2023 [3] - The company has a diversified product portfolio, including soft capsules, gummies, tablets, powders, hard capsules, and nutritional beverages, catering to various consumer needs [22][23] - The company has a strong R&D capability with five global R&D centers and a team led by PhDs, enabling it to provide innovative product solutions [4] - The company has a global supply chain with seven production bases, leveraging China's engineering advantages to enhance R&D efficiency and reduce procurement costs [4] Industry Analysis - The global health supplement market is expected to grow steadily, driven by increasing consumer health awareness and product innovation [2] - The health supplement industry exhibits counter-cyclical characteristics, with demand often remaining strong during economic downturns [2] - The Chinese market, as the second-largest globally, has significant growth potential, with per capita consumption of health supplements at $26 in 2023, much lower than in mature markets like the US and Japan [42][43] - The industry is highly fragmented, with the top 10 brands in China and the US accounting for only 24.6% and 27.5% of the market, respectively, in 2023 [53] - The CDMO model is becoming more prevalent as it offers efficiency advantages for emerging brands, especially in the context of increasing online sales channels [57][59] Future Outlook - The company is expected to continue its growth trajectory, with projected revenues of RMB 4.31 billion, RMB 4.93 billion, and RMB 5.62 billion for 2024, 2025, and 2026, respectively, representing year-on-year growth of 20%, 14%, and 14% [5] - The company's net profit is expected to grow to RMB 387 million, RMB 490 million, and RMB 590 million in 2024, 2025, and 2026, respectively, with corresponding EPS of RMB 1.64, RMB 2.08, and RMB 2.50 [5] - The company's integration of Best Formulations is expected to enhance its market position in North America, with potential for profitability improvements and cost synergies [5] - The company's focus on R&D and manufacturing efficiency, along with its strong customer base, positions it well to capture a larger share of the growing global health supplement market [4][5]