By-health(SZ:300146) Huajin Securities·2024-03-27 16:00Investment Rating - The report assigns an "Add-A" investment rating to the company, indicating a positive outlook for future performance [1][2]. Core Insights - The company achieved a revenue of 94.07 billion RMB in 2023, representing a year-on-year growth of 19.66%, and a net profit of 17.46 billion RMB, up 26.01% year-on-year [1]. - The company plans for a single-digit revenue growth in 2024, primarily due to the high base effect from 2023, with revenue growth targets for 2024-2026 set at 8.1% annually [1][2]. - The probiotics segment showed strong performance, benefiting from increased health awareness among consumers, with domestic revenue from the main brand growing by 21.48% [1][2]. Revenue Analysis - The company's domestic business generated revenues of 54.00 billion RMB, while the overseas business (LSG) achieved 9.89 billion RMB, reflecting a growth of 23.03% [1][2]. - The online sales channel saw a year-on-year increase of 27.53%, with online sales accounting for approximately 41.9% of total sales [1][2]. - The company is focusing on optimizing brand and channel strategies, enhancing operational efficiency, and improving sales effectiveness [1][2]. Profitability Analysis - The gross profit margin for 2023 was 68.89%, with a net profit margin of 18.91% [1][2]. - The company is investing heavily in brand promotion, which has led to an increase in sales expense ratio to 69.58% [1][2]. - The report anticipates that as organizational reforms take effect, the company's profitability will gradually improve [1][2]. Industry Analysis - The vitamin and dietary supplement market in China reached a retail scale of 225.3 billion RMB in 2023, growing approximately 11.6% year-on-year [2]. - The company holds a leading market share of 10.4% in the VDS industry, benefiting from its strong technological innovation capabilities [2]. - The report highlights a trend towards diversification and scientific development in health consumption, indicating a competitive landscape with increasing demand for nutritional products [2]. Future Outlook - The company aims to strengthen its brand and product strategies while optimizing its organizational structure to enhance competitiveness [2]. - Revenue projections for 2024-2026 are set at 103.20 billion RMB, 113.67 billion RMB, and 125.31 billion RMB, with expected growth rates of 9.7%, 10.1%, and 10.2% respectively [2][3]. - The report emphasizes the potential for continued growth in the health supplement sector, driven by rising health awareness post-pandemic [2].