N Huaxi (688363): Global Hyaluronic Acid Production Leader Expands Downstream Growth Industry to Cast Full Industry Chain Business Matrix

N Huaxi (688363): Global Hyaluronic Acid Production Leader Expands Downstream Growth Industry to Cast Full Industry Chain Business Matrix

Company profile: The predecessor of the global hyaluronic acid production company, Shandong Furuida, was founded in 2000. It started from the production of hyaluronic acid raw materials. In 2012 and 2014, it launched independent brands to enter domestic medical terminal products and functional skin care products.

In 2018, raw materials, medical terminals, skin care and other business revenues accounted for 52%, 25%, and 23%, respectively.

The company’s industry division is prominent, being the world’s largest hyaluronic acid production and sales company, accounting for 36% of global output in 2018; domestic market shares of dermatology and orthopedic medical end products are 12% and 9%, respectively; functional skin care productsBusiness revenue exceeded 100 million yuan, and the scale is rapidly increasing.

In 2018, revenue and compound annual average net profit increased by 31.

26%, 25.

43%, and has accelerated in recent years.

Company business: Based on raw material advantage business, expand downstream medical terminal, skin care and other business areas 1) Hyaluronic acid raw material production business: The 21st 北京夜网 century downstream application field of hyaluronic acid is gradually expanded, driving the rapid development of upstream raw material production, and the company’s technological breakthroughs cover costsAdvantages, grasp the potential of the global industry and grow into the world’s largest production base. The products include three major categories of medicine, cosmetics and food grade, with customers all over the world. 16?
The revenue of raw materials over the past 18 years has increased by 19%.

2) Independent brand business of medical terminal products: including dermatology, orthopedics, and other (such as ophthalmology) products. The 18-year revenue accounted for 78%, 19%, and 3% of the business, respectively. The independent brands include Hilda, and HTV.Jian, Runbaiyan, etc., mainly distribution.

Population aging (civilized, cataracts and other elderly diseases), the rise of micro-surgery in a beautiful economy, and the promotion of the industry boom, the company’s business 16?
The average annual growth rate of 18 revenues was 28%.

3) Functional skincare private label business: existing brands such as Runbaiyan, Silky, etc. The products have been developed with original liquids, facial masks, lipsticks, etc., and developed online and in all channels; consumption upgrades the cosmetic industry, and the company is leveraging the industryAnd online channel dividends to achieve rapid development, 16?
The average annual revenue in 18 years has increased by 113%, and the online and offline ratios in 18 years have been 60% and 40%, respectively.

Company advantages: Leading technology in the world, launching its own brand to enter the downstream, successfully building the entire industry chain. The company has the world’s leading hyaluronic acid production technology (high conversion, low impurities) and molecular weight control technology (enzymatic cutting, gradient 3D crosslinking, etc.), Terminal moist heat sterilization technology, etc., so that the company’s raw materials business covers three major application areas of medicine, cosmetics, food, etc., with a wide range, consolidating the leading position; successfully launched its own brand to enter downstream growth industries, leading the technology to create product barriers, and expand overseasNew technologies and new products increase profit growth points, helping to improve overall performance and broad prospects.

Earnings forecast 31.

540,000 yuan is mainly used to enhance research and development and production.

It is expected that the raw material business will grow steadily, downstream independent brands will continue to grow rapidly, the gross profit margin will decrease, and the proportion of downstream business will increase and increase. Marketing expenses will still need to be spent.
The 21-year EPS is 1.



04 yuan.

Risk warning: R & D failure / substitution of new technology or products; marketing supplements are less effective than expected.