Lushang Freda Pharmaceutical (SH:600223) Haitong Securities·2024-11-08 01:18Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The report highlights that the company experienced a revenue decline of 17.45% year-on-year for the first three quarters of 2024, totaling 2.803 billion yuan, with a net profit attributable to shareholders of 171 million yuan, down 28.09% year-on-year. However, the non-recurring net profit increased by 40.09% year-on-year to 151 million yuan [3][4] Summary by Sections Market Performance - The company's stock closed at 7.33 yuan on November 7, 2024, with a 52-week price fluctuation between 5.74 and 10.69 yuan. The total market capitalization is 7.451 billion yuan [1] Financial Performance - For Q3 2024, the company reported a revenue of 877.19 million yuan, a decrease of 4.82% year-on-year, and a net profit of 43.91 million yuan, down 7.76% year-on-year. The gross margin for Q3 was 51.81%, a decline of 3.10 percentage points year-on-year [4][8] - The cosmetics segment generated 1.708 billion yuan in revenue, up 3.25% year-on-year, while the pharmaceutical segment saw a revenue of 370 million yuan, down 7.42% year-on-year [4][6] Operational Review - The company has made strides in its raw materials segment by solidifying its leading position in hyaluronic acid and launching new products. The cosmetics segment has seen innovative sales strategies, contributing to revenue growth [6][7] Financial Forecast - The company is projected to generate revenues of 4.279 billion yuan in 2024, with a year-on-year decline of 6.6%, followed by growth in subsequent years to 4.805 billion yuan in 2025 and 5.307 billion yuan in 2026 [5][11] - The estimated net profit for 2024 is 275 million yuan, reflecting a 9.4% decrease year-on-year, with expectations of recovery in the following years [7][11] Valuation - The report suggests a price-to-earnings (P/E) ratio of 20-25 times for 2025, indicating a market capitalization range of 7.2 to 9 billion yuan, with a reasonable price range of 7.10 to 8.88 yuan per share [7][10]