A sharp increase in performance turned a loss into a profit
In 2022, the company achieved revenue of RMB 3.745 billion, an increase of 309.83% over the previous year, turning a loss into profit of net profit of $77 million, an increase of 664 million yuan over the same period last year. Mainly due to the easing of the domestic epidemic, the movement of people and the increasing normalization of daily social activities, traffic in terminal medical institutions, medical treatment and drug sales are recovering.
There was a full-scale outbreak of Kewei, and Hepatitis C products entered medical insurance. The diabetes sector was poised for a full-scale outbreak in 2022. Annual sales (granules+capsules) were 3,093 billion yuan, an increase of 457.66% over the previous year. Among them, Kewei granules contributed 2,585 million yuan, +450.64% over the same period last year, and Coway capsules contributed 508 million yuan, +496.36% year on year. In terms of channels, Comwell, as the company's core product, accounts for about 60% of sales on the hospital side, and the coverage rate of level-II and tertiary hospitals has reached 70% and 76% respectively. Oseltamivir products have taken a leading position in the domestic anti-influenza treatment field. The company's four insulin products were approved for listing, and a great deal of effort was invested in completing admissions and dosage work. Taking glycine insulin as an example, shipments increased from 13,600 in the first quarter to 6,5560 in the third quarter and 67,300 in the fourth quarter. Up to now, 1,934 terminal hospitals have been developed. Emitavir phosphate successfully entered medical insurance. From January to July 2022 alone, sales increased from 90,000 yuan to 5.63 million yuan. Monthly CAGR = 98%. Currently, sales have only started in some provinces. The endocrine and metabolic drug ertoncu (phenbrommalone tablets) achieved sales of 98 million yuan, an increase of 27.6% over the previous year, the anti-infective drug clarithromycin tablets achieved rapid growth of 31.54%, and the cardiovascular drug omenin (telmisartan tablets) and olmesartan ester tablets achieved sales of 0.63 million yuan and 44 million yuan respectively, up 19.14% and 26.65% year-on-year. Currently, the company sells 40 kinds of pharmaceutical products, signed a strategic cooperation agreement with Kyushu Express Medical, authorized Kyushu Express to sell Weiwei's exclusive general agency rights through OTC channels in mainland China for a period of three years, and also signed a strategic cooperation agreement with Beijing Kain Technology to “eliminate hepatitis C”.
Industry-leading research institutes fully support commercializing diabetes for high-value products. Currently, rongliflozin has entered clinical phase III, liraglutide is awaiting marketing applications, and HEC88473 is simultaneously undergoing phase I clinical trials in China and Australia, preparing to apply for US clinical trials. Oral hypoglycemic drugs are expected to be marketed in 2023. In terms of hepatitis C, antetavir/ingangbuvir is the first genotypic combination program originally developed locally. It is undergoing clinical phase III. It has the advantages of being able to treat all patients, no genotype screening, high liver safety, and not affected by baseline drug resistance. It is expected to be marketed by the end of 2023. Among other new drugs, the antineoplastic lelotinib and clifotinib have both entered clinical phase III, and Mofexil mesylate and Degu insulin are also undergoing clinical phase III.
Our point of view
The beginning of 2023 has entered a period of high incidence of influenza A, and oseltamivir phosphate is expected to usher in a historical breakthrough this year. We are optimistic that Dongyang Pharmaceutical's revenue will continue to grow in 2023. Currently, the market capitalization is only HK$7.1 billion. It does not fully reflect the rapid increase in profits brought about by the sharp increase in sales of Kewei this year. Active attention is recommended.