Lushang Freda Pharmaceutical (SH:600223) Changjiang Securities·2024-11-18 07:24Investment Rating - The report maintains a "Buy" rating for the company [5][6]. Core Insights - In Q3 2024, the company achieved revenue of 877 million yuan, a year-on-year decrease of 4.8%, and a net profit attributable to shareholders of 44 million yuan, down 7.8% year-on-year [3]. - The cosmetics and raw materials business faced temporary pressure, but the pharmaceutical business showed signs of recovery with a 20% year-on-year revenue increase, primarily due to price adjustments and sales channel management [3][4]. - The overall profitability improved, with a slight decrease in net profit margin by 0.2 percentage points year-on-year, attributed to effective cost control in sales and management expenses [4]. Summary by Sections Business Performance - The cosmetics business saw a revenue decline of 4.7% year-on-year, with specific brand performances varying: Yilian down 4%, Aier Doctor down 11%, while other brands increased by 42%. Gross margin improved by 4.3 percentage points due to product structure upgrades [3]. - The pharmaceutical segment's revenue growth was driven by price adjustments, although gross margin decreased by 2.0 percentage points. Investment income from Bausch + Lomb reached 9.43 million yuan, up 45,000 yuan year-on-year [3]. - The raw materials business experienced a revenue decline of 6.9%, but gross margin improved by 2.7 percentage points [3]. Financial Projections - The company expects EPS of 0.25, 0.31, and 0.34 yuan per share for 2024, 2025, and 2026 respectively, reflecting a positive outlook based on brand upgrades and pricing strategies [5]. - The current stock price is 6.94 yuan, with a total share capital of 101.657 million shares and a net asset per share of 4.02 yuan [6]. Market Position - The company is focusing on enhancing its main brands and optimizing channel structures, which is expected to contribute to overall profitability improvements [5].