The company achieved revenue of 11.334 billion yuan in 2022, an increase of 16.8% over the previous year; it achieved net profit of 1,581 million yuan, an increase of 60.0% over the previous year. The main factors driving the sharp increase in the company's performance in 2022 were: (1) the continued rise in market prices of intermediate products and APIs; (2) the reduction in impairment losses on receivables by about RMB 300 million, offsetting increases in R&D costs and tax expenses of about RMB 100 million and RMB 200 million respectively.
If the impairment loss of 300 million yuan in receivables is added back in 2021, adjusted net profit attributable to the mother in 2022 increased 23.1% year over year.
Prices of intermediates and APIs have risen and are beginning to contribute to major profits. In 2022, intermediates achieved revenue of 1,599 billion yuan, a year-on-year decrease of 5.9%; accounting for 14.1% of total revenue, a year-on-year decrease of 3.4 pct; and segment profit accounted for 43.7%, an increase of 16.8 pct over the previous year. In 2022, APIs achieved revenue of 5.175 billion yuan, an increase of 30.4% over the previous year; they accounted for 45.7% of total revenue, an increase of 4.8 pct over the previous year; segment profits accounted for 18.4%, an increase of 4.7 pct over the previous year.
The sales price and sales volume of API products continued to rise, while the sales prices of intermediate products remained high. Among the APIs, semisynthetic penicillins contributed the most. The foreign sales price in 2022 was 210.2 yuan/kg, an increase of 27.4% over the previous year, and achieved sales revenue of 3.464 billion yuan, an increase of 32.8% over the previous year. The overall price system for upstream products is expected to continue to be maintained.
The veterinary drug sector is growing rapidly, and insulin collection is affected. In 2022, pharmaceutical products achieved sales revenue of 4.56 billion yuan, an increase of 13% over the previous year; accounting for 40.2% of total revenue, a decrease of 1.4 pct over the previous year; distributed profit accounted for 37.9%, a decrease of 21.5% over the previous year. Among them, diabetes products achieved revenue of 1,176 billion yuan, a decrease of 18% over the previous year, but sales of various products maintained year-on-year growth, which is expected to accelerate the domestic substitution process in the future; antibiotic products achieved revenue of 3,063 billion yuan, an increase of 32.9% over the previous year; veterinary pharmaceutical preparations achieved revenue of 797 million yuan, a sharp increase of 106.1% over the previous year, and the acceleration of the systematic upgrading of the domestic veterinary drug industry will become the company's new driving force for development.
Increase investment in R&D, and empower innovative research and development with federal biotechnology. R&D investment in 2022 was 594 million yuan, an increase of 27.6% over the previous year. The company is currently developing 29 new products, 15 of which are new drugs of the first class. The company has established a comprehensive R&D system. Multiple platforms such as biological research and development, chemical research and development, innovative drug research and development, clinical research centers and foreign cooperation have collaborated to focus on the fields of endocrinology, autoimmunity and ophthalmology to lay out the future and enhance long-term competitiveness.
The company is a leading domestic antibiotic API enterprise. The intermediates, API and formulation business are developing collaboratively. The overall price system for upstream products is expected to continue to be maintained. At the same time, as the influence of insulin collection gradually subsides and new products are launched, the company's performance is expected to maintain steady development.
Risk warning: Risk of price fluctuations of intermediates and APIs, post-collection insulin sales fall short of expectations, and R&D progress falls short of expectations.