Performance summary: in 2022, the company achieved operating income of 5.72 billion yuan, an increase of 27% over the same period last year, with a net profit of 920 million yuan, an increase of 30.4% over the same period last year, and a net profit of 910 million yuan, an increase of 31.2% over the same period last year.

In the fourth quarter alone, revenue reached 1.61 billion yuan, an increase of 24.4% over the same period last year, and the net profit of returning home was 200 million yuan, an increase of 8.1% over the same period last year. In the first quarter of 23, the company achieved revenue of 1.41 billion yuan, an increase of 19.9% over the same period last year, and its net profit was 190 million yuan, down 2.9% from the same period last year. The net profit after deducting non-return was 190 million yuan, down 2.7% from the same period last year.

Comments: the increase in company revenue in 2022 is mainly driven by key projects, and new products related to fund-raising projects have been put into the market one after another, with rich product matrix and increased sales. In 22 years, the first phase of doxycycline reached the production standard, while expanded products such as moxifloxacin hydrochloride, vioglitine, lanthanum carbonate, GBMC, trimethyl borate and cypromazine all increased in a large proportion. The simultaneous growth of profits benefits from the increase in market share and competitiveness of major products. From the point of view of project construction, the company's characteristic API and industry chain improvement project Tyramycin and other products have been completed and debugged successfully, and the first phase of the project with an annual output of 4500 tons of florfenicol has been carried out smoothly. The construction of the second phase of the project with an annual output of 1500 tons of doxycycline has entered the stage of installation and adjustment, and the construction of sodium borohydride series of products has been carried out equipment installation, and the future product categories will become more diverse, and the performance is expected to further grow.

With the increase of the proportion of large-scale breeding farms and the improvement of animal protection, the company grasps the advantage of product quality and constantly enriches the product matrix. In 2022, there were 700 million pigs in the country, and the total number of ten listed pig farming enterprises reached 120 million, accounting for about 17%, an increase of 3 percentage points compared with 21 years. On the other hand, the new version of GMP was officially implemented to raise the entry threshold of the veterinary drug industry and eliminate backward production capacity. The phenomenon of recurrence of non-plague dispersal points occurred in Q1 northern cities in Q4-23 in 22 years. Breeding enterprises need to further improve the level of epidemic prevention and pay attention to biosafety protection. The new version of the "Veterinary Drug GMP acceptance Evaluation Standard" will be implemented in June 2020 to raise the entry threshold for veterinary drug production and avoid low-level repeated construction and overcapacity. It is stipulated that veterinary drug manufacturing enterprises must pass the new version of the audit standard before June 1, 2022 before they can continue production and operation, and the backward production capacity will be eliminated by the market. The company develops animal protection API and preparation business with rich product matrix and strong comprehensive competitive advantage. the leading products florfenicol and enrofloxacin contribute more than 100 million in revenue and have a high market share. the main products also include doxycycline, cypromazine, dikezuril and mabofloxacin, which are widely used in the field of animal protection.

"one system, two platforms" creates a comprehensive advantage. The pharmaceutical sector develops synchronously and promotes the integration of the industrial chain. One system refers to effective management and innovation system. The two platforms are advanced and complete large-scale manufacturing platform and extensive and effective global market channel platform. In terms of production and manufacturing, the company has mastered the typical chemical reaction and solvent technology in production, and saved costs through integrated research layout to form the advantage of intensive manufacturing. In terms of channel platform, the company serves customers at home and abroad, integrates domestic and foreign trade, covers sales networks on six continents, sells products to 115 countries and regions, and has established trade and cooperative relations with more than 3000 customers around the world. The company has established API sales channels in India, the Netherlands, South Korea, Pakistan and Spain, and semi-preparation products are also sold to Southeast Asia and Africa. In the pharmaceutical business, the company is one of the world's largest suppliers of macrolides and quinolones, including antibiotics, cardiovascular, respiratory, urinary and antineoplastic drugs. The main products azithromycin, clarithromycin, roxithromycin, ciprofloxacin hydrochloride are sold more than 100 million yuan of single series. At the same time, the company carries out the production of key pharmaceutical intermediates, focusing on reducing agent series products, advanced amine series products, etc., to create an integrated layout of intermediate-API-preparation industry chain.

Profit forecast and investment advice. It is estimated that the EPS from 2023 to 2025 will be 1.98,2.45,2.93 yuan respectively, and the corresponding dynamic PE will be times higher than that in 13-10-9, maintaining the "buy" rating.

Risk hints: project construction is not as expected, product sales are not as expected, sudden epidemic situation in the aquaculture industry and other risks.