Speaking of Bloomage Biotech, everyone thinks of the leading enterprise of hyaluronic acid raw materials, because the main product of Aimeike, a popular medical aesthetic company in the market, is hyaluronic acid, everyone habitually compares Bloomage Biotech with Aimeike. In 2022, Bloomage Biotech's net profit will be 9700 million, Aimeike 119.7 billion. The net profit gap between the two is not large, but the current market value is far apart, Bloomage Biotech is 30 billion +, Aimeike is 60 billion +, why is this? In the last issue, we talked about Aimeike, and today we will talk about Bloomage Biotech.
First of all, the basic indicators of Bloomage Biotech:High growth, high gross margins, but high expenses, resulting in unsatisfactory returns
Rapid growth. Revenues from 2106 to 733, an increase to 63 in 20225.9 billion, an increase of more than 7 times in 6 years, with an annualized growth rate of 43%+. Non-net profit is deducted from 231 grew to 852, an increase of more than 2 times, with an annualized growth rate of 24%+. Although the income is so fast, it has doubled in 6 years, which is also a rapid growth.
The gross profit margin is high and basically stable, but the net profit is declining and the selling expenses are high. The gross profit margin is basically maintained at 79%+, indicating strong competitiveness. In the case of little change in gross profit margin, the net profit margin has been declining since 2019, indicating that expenses have increased during the period. From the following two expense charts, it can be seen that the increase in expenses during the period continued to erode net profit, mainly sales expenses.
The rate of return is average and needs to be improved. ROE is average, and after going public in 2019, net assets have increased significantly, pulling down ROE, with a 3-year average of 146。The ROIC is also average, averaging 14 over 3 years1%。Compared with the companies we talked about before, such as Aimeike, Proya, and Bethany, the rate of return of Bloomage Biotech is not very ideal, and we look forward to the reduction of sales expenses or the improvement of asset utilization rate in the future.
Low debt risk and liquidity risk. In 2022, the debt ratio is 23%, the current and quick ratios are basically greater than 2, and the debt risk and current risk are low.
1.Insufficient cash self-sufficiency. It can be seen that after the listing of Bloomage Biotech in 2019, investment has increased; With the exception of 2021, operating cash flow is largely unable to cover investments.
2.Businesses rely primarily on endogenous expansion to grow. It is mainly reflected in the investment in fixed assets and intangible assets, as well as the continuous increase in R&D investment. Extended mergers and acquisitions are mainly due to the integration of several companies controlled by major shareholders through an asset restructuring before they were listed in 2018. Flower 2100 million 100% acquisition of Shandong Haiyu, 02.9 billion 100% acquisition of Beijing Haiyu, 4.91 million 100% acquisition of Bloomage Medical Equipment, 017.8 billion euros (about 1.8 billion euros3.9 billion) 100% acquisition of France's Revitacare, 03.6 billion Hong Kong dollars (about) 100% acquisition of Hong Kong Chan & Son, 0HK$16.7 billion 50% medybloom.
3.Re-investThe IR rate remains high. It can be seen from the chart that the reinvestment rate of enterprises has remained 100%+ for several consecutive years, mainly due to the increase in R&D and investment in fixed assets. The average reinvestment rate in the past five years is 108%, indicating that enterprises are optimistic about the future development and continue to increase investment.
1.The valuation is high at the time of listing, and the dividend is stable after listing. In 2019, it was listed and financed 236.9 billion, compared to 4 in 2018200 million net profit, valuation as high as 54 times, high valuation; Since its listing, the annual dividend has been stable, with a total of 90.4 billion.
2.Good free cash flow. Positive free cash flow every year, with a total of 32700 million, especially in 2021, the free cash flow is as high as 1 billion; The average free cash flow over the past 5 years is 5500 million.
Should Bloomage Biotech be characterized as a raw material company, a medical beauty company, or a cosmetics company?
Looking at the revenue proportion of Bloomage Biotech's products in 2022, it is found that its hyaluronic acid raw material revenue accounts for only 15%+, medical beauty accounts for 10%+, and functional skin care products account for 70%+. It can be seen that Bloomage Biotech should not be characterized as a raw material company, nor a medical beauty company, but as a cosmetics company.
However, with six R&D platforms, Bloomage Biotech has gradually extended its product types from hyaluronic acid raw materials to a variety of bioactive substances, medical end products, functional skin care products and functional foods, covering the complete industrial chain from hyaluronic acid raw materials to related end products.
It can be seen that Bloomage BiotechThe core competitiveness is independent research and development and production of hyaluronic acidCapabilitiesWith hyaluronic acid as the core, it is expanded to various end products。It shows that Bloomage Biotech has many possibilities; The end product can be medical beauty, cosmetics, or functional food.
Therefore, for the qualitative nature of Bloomage Biotech, it should be saidThere are many possibilities for Bloomage Biotech. It cannot be simply characterized as a leader in hyaluronic acid raw materials, or a medical beauty company, or a cosmetics.
After Bloomage Biotech was launched, it made efforts to develop functional skin care products. Skin care products belong to the cosmetics industry, and the cosmetics industry needs brand precipitation. As a new entrant, Bloomage Biotech has invested a lot of advertisements to build its brand; The financial report is the continuous rise in sales expenses and the decline in net profit, which is the reason for the large expenses during the period mentioned above.
Cosmetics take the initiative to slow down the development speed and cultivate internal strength。The brand building of cosmetics has a long way to go, after several years of vigorous promotion, the increase in income does not increase profits, and the management has said that it will take the initiative to slow down the development speed and cultivate internal skills.
In the future, we will focus on the efforts of medical cosmetology, as well as the effectiveness of cultivation in skin care products.
In terms of medical aesthetics, Bloomage Biotech launched the doll needle "Runzhi" in 2020, improved the "ironing needle" in 21 years, and launched the "Runzhi Zhenhuo" for post-restoration of medical art in 22. The successive launch of new medical aesthetic products is worth looking forward to.
In terms of skin care products, we will examine whether revenue can be maintained and net profit can be improved without increasing or decreasing sales expenses in the future.
The decline in revenue and net profit in the third quarter of this year is not a good signal, it seems that medical beauty products have not been able to bring growth in volume, and the internal strength of skin care products still has to be cultivated...
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Risk Warning: The article is only for my own study of investment notes, for reference only, and does not make investment recommendations; Buy and sell accordingly at your own risk.