YUNNAN BAIYAO(000538) 华创证券·2024-10-31 15:37Investment Rating - The report maintains a "Recommend" rating for Yunnan Baiyao with a target price of 72.2 RMB, compared to the current price of 57.06 RMB [1] Core Views - Yunnan Baiyao's performance remains stable, with a proposed special dividend to enhance shareholder returns [1] - The company achieved revenue of 299.2 billion RMB, net profit attributable to shareholders of 43.3 billion RMB, and non-GAAP net profit of 42.6 billion RMB in the first three quarters of 2024, representing year-on-year growth of 1%, 5%, and 11% respectively [1] - In Q3 2024, revenue was 94.6 billion RMB, with net profit attributable to shareholders and non-GAAP net profit at 11.4 billion RMB and 11.3 billion RMB respectively, showing mixed year-on-year changes [1] - The company plans to distribute a special dividend of 12.13 RMB per 10 shares, totaling 2.164 billion RMB, accounting for 50.02% of the net profit attributable to shareholders in the first three quarters [1] Business Segment Analysis Health Products Division - The health products division is expected to maintain stable performance despite consumer pressure [2] - Revenue for the health products division in H1 2024 was 3.14 billion RMB, slightly down from 3.25 billion RMB in H1 2023 [2] - The Yang Yuan Qing product line is expected to maintain rapid growth [2] Pharmaceutical Division - The pharmaceutical division is expected to grow steadily, with revenue growth of 5-10% in the first three quarters of 2024 [2] - Revenue for the pharmaceutical division in H1 2024 was 4.07 billion RMB, a 9.6% year-on-year increase [2] - Contract liabilities in Q3 2024 reached 2.49 billion RMB, a significant increase from 1.76 billion RMB in H1 2024, mainly due to increased prepayments in the pharmaceutical division [2] Financial Performance - Gross margin in Q3 2024 decreased by 0.5 percentage points year-on-year to 26.5%, possibly due to a slowdown in high-margin pharmaceutical revenue growth [2] - Operating cash flow in Q3 2024 was 4.07 billion RMB, a significant increase from 2.59 billion RMB in the same period last year [2] - The company's financial ratios show improvement, with sales/management/R&D/financial expense ratios decreasing year-on-year by 1.0/0.4/0.1 percentage points respectively, while financial expense ratio increased by 0.9 percentage points [2] Future Projections - The report forecasts net profit attributable to shareholders of 4.603 billion RMB, 5.152 billion RMB, and 5.668 billion RMB for 2024, 2025, and 2026 respectively, representing year-on-year growth rates of 12%, 12%, and 10% [2] - Revenue is expected to grow to 42.227 billion RMB, 45.318 billion RMB, and 48.458 billion RMB in 2024, 2025, and 2026 respectively, with year-on-year growth rates of 8.0%, 7.3%, and 6.9% [3] - The company's EPS is projected to be 2.58 RMB, 2.89 RMB, and 3.18 RMB for 2024, 2025, and 2026 respectively [3]