CONBA(SH:600572) SINOLINK SECURITIES·2024-04-22 01:30Investment Rating - The report maintains a "Buy" rating for the company, with a target price of RMB 5.04 [24] Core Views - The company achieved revenue of RMB 6.733 billion in 2023, a YoY increase of 12.2%, and net profit attributable to shareholders of RMB 592 million, a YoY increase of 65.2% [2] - The traditional Chinese medicine (TCM) and health business contributed RMB 4.544 billion, accounting for 67.49% of total revenue, with a YoY growth of 16.13% [2] - The company's core product "Kang En Bei" brand Changyanning series achieved sales of nearly RMB 1.3 billion, a YoY increase of 28% [2] - The company completed the transfer of a 7.84% stake in its subsidiary Zhen Shiming for RMB 290 million, aiming to accelerate its development and independent capital market access [2] Financial Performance - In Q4 2023, the company reported revenue of RMB 1.55 billion, a YoY increase of 2.4%, but a net loss attributable to shareholders of RMB -32 million [2] - The company's gross profit margin for 2023 was 58.5%, with operating expenses accounting for 34.0% of revenue [20] - The company's ROE (Return on Equity) improved to 8.40% in 2023, up from 5.18% in 2022 [20] Business Strategy - The company is focusing on optimizing its product structure, with significant growth in its TCM and health business [2] - The company has 17 products with sales exceeding RMB 100 million, contributing RMB 4.619 billion in revenue, a YoY increase of 12.93% [2] - The company is actively integrating resources, including the full acquisition of four subsidiaries and the disposal of inefficient land and property assets, raising RMB 65 million [2] Future Outlook - The report forecasts revenue growth of 12.87% in 2024, reaching RMB 7.599 billion, and net profit attributable to shareholders of RMB 678 million, a YoY increase of 14.53% [20] - The company's EPS (Earnings Per Share) is expected to be RMB 0.264 in 2024, with a P/E ratio of 19.12x [20] - The company's ROE is projected to increase to 9.40% in 2024, further improving to 10.90% by 2026 [20]