1Q23 Achieved a deduction of 60 to 67 million yuan in non-net profit

The company released its 1Q23 performance forecast, which is expected to achieve net profit of 86-93 million yuan (loss of 850,000 yuan in the same period last year) and net profit of 60 to 67 million yuan (loss of 3.6 million yuan in the same period last year). The sharp loss on the profit side was mainly due to the 1Q23 influenza A outbreak in many places, driving influenza vaccine sales. Based on the high influenza epidemic expectations for the whole year (low expected immunity in the population, high prevalence of influenza A in 1Q23), which is expected to catalyze demand for influenza vaccination, we expect the company's net profit to the mother in 2023-25 to be 9/1,19/15 billion yuan, an increase of 74%/31%/26% over the previous year. We gave the company a 23-year PE valuation of 27x (comparable company Wind agreed that the average PE valuation was 25x. Considering the expected upward recovery of the influenza vaccine industry and the company's production capacity advantage, a certain premium was given), a target price of 61.04 yuan (previous value of 56.52 yuan) to maintain “buying”.

Influenza vaccine: Sales of the 1Q23 influenza vaccine have increased, and demand may recover throughout the year. We expect the company's 1Q23 influenza vaccine revenue to be 140 to 150 million yuan (1Q2214.58 million yuan) and sales volume of 1.1 to 1.2 million units. The optimization of epidemic prevention policies and the increase in the movement of people raised influenza epidemic expectations in 2023. We expect influenza vaccine sales to exceed 20 million doses in 23:1) The double low popularity plus vaccination rate in the past two years caused insufficient pre-immunization of the population. Combined with crowd activity, the influenza weekly report for the 13th week showed a clear decline in influenza in the north and a high level in the south. We expect influenza popularity to increase in 2023; 2) The 1Q23 influenza epidemic will greatly drive demand for vaccination. We expect high epidemic expectations+disease control emphasis, which is expected to promote vaccination; 3) Company; The annual production capacity of influenza vaccines is 100 million, and production began in February, which is expected to maintain the first-mover advantage.

New products are expected to contribute incrementally, and the research pipeline continues to advance

1) The Vero cytomaniac vaccine and tetanus vaccine 2M23 were approved. The former has fewer DNA residues and is safer, and has a 4-dose and 5-dose method. The latter is purified first and then detoxified and has better immunogenicity. The two vaccines are expected to grow collaboratively into large varieties through product quality, pricing systems, and blood product sales resources. In 23, we expect MenAC to enter production and achieve phase III clinical trials for dTAP; 3) The company will establish an mRNA R&D platform to actively explore mRNA influenza Vaccine research and development is currently in the early stages of research and development; 3) Promoting COVID-19 vaccine research and development.

The implementation of equity incentives is expected to stimulate business vitality

The company's equity incentive has been granted for the first time (3.4 million shares were granted for the first time, accounting for 0.85% of the company's total share capital, with another 600,000 shares reserved). The award targets 28 directors, executives and core executives, with a grant price of 24.42 yuan. The performance assessment target is based on 2021. The growth rate of net profit after deducting non-net profit from 2023 to 25 will not be less than 40%/80%/100%, that is, after deducting non-net profit of 82/10.5/1.17 billion yuan from 23 to 25. We believe that the company's equity incentive plan is set up reasonably, covers the main core core, and is expected to help the company develop in the long term.

Risk warning: The prevalence of influenza and product sales fall short of expectations, R&D progress falls short of expectations, the development of COVID-19 and the risk of changes in prevention and control policies.