occurrences
On March 27, 2023, the company announced its full-year results for 2022, achieving revenue of 43.952 billion yuan, an increase of 12.66% over the previous year; net profit returned to the mother after deduction was 3.873 billion yuan, an increase of 18.17% over the previous year. The performance was in line with expectations.
reviews
The structure of the pharmaceutical sector has been optimized, with new products accounting for more than 30%. (1) On the revenue side, by sector, the pharmaceutical sector's revenue was 30.8 billion yuan, an increase of 6.6% over the previous year, accounting for 70% of total revenue; the revenue of the medical device and medical diagnostics sector was 6.949 billion yuan, an increase of 17.03% over the previous year, accounting for 15.81% of total revenue; the revenue of the healthcare services sector was 6.08 billion yuan, an increase of 47.64% over the previous year, accounting for 13.83% of total revenue. The company's comprehensive gross margin was 47.3%, a slight decrease of 0.8% over the previous year. The gross profit of pharmaceutical/device diagnostic/health services was 55.08%/38.28%/18.67%, respectively, and 2.96%/-10.49%/-0.39%, respectively.
(2) Optimizing the structure of the pharmaceutical sector and releasing revenue from innovative drugs. New and sub-new products in the innovative pharmaceutical sector continued to grow rapidly, accounting for more than 30% of the pharmaceutical business, an increase of more than 25% over the previous year, mainly due to the revenue contribution of the newly launched product Hans, Jebeian, and the revenue growth contribution of the sub-new products Han Qu You and Su Kexin. The company continues to enhance pipeline value and promote the development and commercialization of more FIC and BIC products. (3) By region, mainland China's revenue was 30.014 billion yuan, accounting for 68.29% of total revenue; revenue from regions and countries outside mainland China was 13.938 billion yuan, accounting for 31.71% of total revenue, up 2.49% from the previous year. The company's internationalization strategy progressed steadily in the face of many challenges brought about by the epidemic last year. A number of BD collaborations were launched last year. Amgen reached exclusive commercial cooperation in China on Autel (apmister tablets) and Parsabiv (eticapeptide hydrochloride injections), and successively granted overseas rights licenses for various products to Organon, Eurofarma, Abbott and other companies, with a total down payment of 78 million US dollars.
Following the launch of key new products such as Premium Chinese Music, many innovations have made positive progress in the research pipeline. R&D investment in the company's pharmaceutical sector grew strongly, rising 13.62% year on year to 5097 billion yuan. In the product pipeline, Hans, Yikaida, Hanlikang, etc. all have market potential of more than 2 billion yuan. In the research pipeline, there are 90 innovative drug projects with more than 30 molecular entities, covering the fields of tumor immunity, chronic diseases and CNS, and the proportion of FIC+BIC products in the pipeline exceeds 80%.
Profit Forecasts, Valuations, and Ratings
Considering that the company's innovative drugs are expected to continue to contribute to increased performance in the future, we expect 2023/24/25 revenue of 516/594/68.5 billion yuan, an increase of 17.34%/15.14%/15.34% over the previous year; the net profit of the mother was 46/54/6.5 billion yuan, an increase of 23%/19%/20% over the previous year. The current stock price corresponds to 2023/24/25 19/16/13X PE, maintaining the “buy” rating.
Risk warning
New product development and sales fall short of expectations, increased risk of product competition, risk of falling short of expectations, risk of price reduction of bioinnovative drug collection, risk of BD being blocked, and risk of shareholder holdings reduction.