Lushang Freda Pharmaceutical (SH:600223) Guoxin Securities·2025-03-24 06:36Investment Rating - The investment rating for the company is "Outperform the Market" [1][4][7] Core Views - The company experienced fluctuations in performance due to the divestiture of its real estate development business in 2024, but overall performance remained stable when excluding this impact. The company achieved a revenue of 3.983 billion with a year-on-year decrease of 13.02%, and a net profit attributable to shareholders of 244 million, down 19.73%. However, the net profit excluding non-recurring items increased by 54.54% to 215 million. When excluding the real estate impact, the annual revenue remained flat, with a net profit growth of 6.1% and a growth of 5.26% in net profit excluding non-recurring items [1][4][9]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 3.983 billion, a decrease of 13.02% year-on-year, and a net profit of 244 million, down 19.73%. The net profit excluding non-recurring items was 215 million, reflecting a significant increase of 54.54%. In Q4 alone, the revenue was 1.180 billion, with a slight decrease of 0.33% year-on-year, while the net profit was 72.36 million, up 10.72% year-on-year [1][4][9]. Cosmetics Segment - The cosmetics segment generated a revenue of 2.475 billion in 2024, an increase of 2.46% year-on-year, with a gross margin of 62.57%, up 0.44 percentage points. The main subsidiary, Furuida Bio, achieved a revenue of 2.166 billion and a net profit of 193 million, with a net profit margin of 8.9%, an increase of 0.65 percentage points year-on-year. In Q4, the cosmetics segment revenue was 767 million, up 0.7% year-on-year, with a gross margin of 63.13%, up 0.9 percentage points [2][9]. Pharmaceutical Segment - The pharmaceutical segment reported a revenue of 512 million in 2024, a slight decrease of 1.41% year-on-year, but in Q4, it rebounded with a revenue of 142 million, up 17.4% year-on-year, and a gross margin of 57.11%, an increase of 7.12 percentage points [10]. Raw Material Additives Segment - The raw material additives segment achieved a revenue of 343 million in 2024, down 2.43% year-on-year, with a gross margin of 35.92%, up 3.62 percentage points. In Q4, the revenue was 94 million, down 4.1% year-on-year, but the gross margin improved to 26.73%, up 3.8 percentage points [10]. Profitability and Efficiency - The company's gross margin and net margin for 2024 were 52.68% and 7.44%, respectively, with a year-on-year increase of 6.19 percentage points and a decrease of 0.56 percentage points. The sales expense ratio increased by 5.14 percentage points due to brand promotion investments, while the management expense ratio decreased by 0.28 percentage points [3][12]. Future Outlook - The company is focusing on its core cosmetics business following the divestiture of its real estate segment. Despite facing competitive pressures and internal adjustments, the company is implementing strategic changes and cost-reduction measures, which are expected to improve overall performance in the future. The net profit estimates for 2025, 2026, and 2027 have been adjusted to 293 million, 323 million, and 354 million, respectively, with corresponding PE ratios of 26, 23, and 21 [4][20].