Winner Medical(300888)2024-11-13 07:23Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Insights - The company achieved revenue, net profit attributable to shareholders, and net profit excluding non-recurring items of 2.04 billion, 170 million, and 140 million yuan in Q3 2024, representing year-on-year changes of +16.8%, -88.5%, and +104.5% respectively. For the first three quarters, the cumulative revenue, net profit attributable to shareholders, and net profit excluding non-recurring items were 6.07 billion, 550 million, and 470 million yuan, with year-on-year changes of +1.0%, -74.3%, and -24.0% respectively [3][4]. Revenue Analysis - In Q3, revenue accelerated with a year-on-year increase of 20.6% to 1.08 billion yuan, driven by core product categories. The core product, the dry and wet cotton soft towel, led the growth with a year-on-year increase of 47.1%. The sanitary napkin and adult clothing categories also saw year-on-year growth rates of 17.1% and 23.8% respectively. Both online and offline channels contributed to growth, with online and offline revenues increasing by 14% and high double digits year-on-year respectively [4][5]. - Medical revenue in Q3 increased by 13.1% to 940 million yuan, with conventional consumables growing by 14.3% to 850 million yuan. Core categories such as high-end dressings and health personal care maintained growth rates of +33.5% and +36.2% year-on-year respectively. Overseas revenue increased by 12.7% year-on-year, supported by the completion of the GRI acquisition, which is expected to enhance overseas capacity and localization [4][5]. Profitability Analysis - The gross margin in Q3 was 47.0%, remaining stable year-on-year. The year-on-year decline of 88.5% in net profit attributable to shareholders was primarily due to a significant profit boost from an urban renewal project in the same period last year, which added 1.36 billion yuan to profits. Excluding this impact, net profit attributable to shareholders increased by 62.2% year-on-year. The reduction in asset impairment losses and income tax expenses contributed positively to profitability [5][6]. - The company effectively controlled sales expenses, with sales, management, R&D, and financial expense ratios decreasing by 2.3 percentage points, 0.3 percentage points, and increasing by 0.1 percentage points and 1.0 percentage points year-on-year respectively, leading to a 3.1 percentage point increase in net profit margin excluding non-recurring items to 7.1% [5][6]. Future Outlook - The company aims to become a one-stop dressing provider by extending its product categories in the medical sector. In the consumer sector, it focuses on optimizing pricing and reducing costs to enhance profitability, with positive results starting from 2022. The strategy for 2023 is to concentrate on core products to gradually boost revenue. From 2024 onwards, the company plans to consolidate its conventional business and continue high-quality growth. The projected net profit attributable to shareholders for 2024-2026 is 800 million, 930 million, and 1.08 billion yuan, corresponding to P/E ratios of 24, 21, and 18 times [6][7].