The increase in performance was in line with expectations. On April 18, the company released its 22-year annual report and 23-year quarterly report, achieving steady growth in revenue and profit. In '22, revenue of 568 million yuan was achieved, an increase of 8.92% over the previous year, and Guimu's net profit was 177 million yuan, an increase of 47.51% over the previous year, after deducting net profit of 172 million yuan from the non-return mother, an increase of 49.39% over the previous year. On a quarterly basis, Q4 achieved revenue of 170 million yuan in a single quarter, an increase of 0.70% over the previous year, and net profit of 50 million yuan returned to the mother, an increase of 47.46% over the previous year. The company responded positively to the external downturn, and its performance growth was in line with expectations. In the first quarter of '23, the company achieved revenue of 156 million yuan, an increase of 10.38% over the previous year, net profit of 52 million yuan, an increase of 29.28% over the previous year, after deducting net profit of 45 million yuan from non-return mothers, an increase of 34.31% over the previous year.
The main business continues to grow, and production and sales of lipoic acid are booming. In 2022, the company's main business revenue was 549 million yuan, an increase of 7.29% over the previous year, accounting for 96.61% of revenue. The company actively faced the unfavorable situation where logistics transportation was interrupted and the supply of raw materials was blocked, and fully mobilized resources from all sources to stabilize production. Among them, the company's key product, the lipoic acid series, is in strong demand, maintaining full production capacity, and the capacity utilization rate is high (reaching 105.24%). At the same time, the company raised prices for some products in the lipoic acid series, and the sharp rise in the volume and price of granular lipoic acid drove the company's gross margin and operating income growth.
The commercialization of the CMO/CDMO business is progressing smoothly, and investment in R&D in the specialty API sector has increased. In 2022, the company and Hengrui Pharmaceutical collaborated on a breakthrough in the irexib API commercialization project; the development of the apatinib API commercialization project progressed smoothly, and registration data was submitted to the China Drug Administration Evaluation Center in August 22. The company spent 41 million yuan on R&D in 2022, an increase of 45.08% over the previous year, a record high for the company. The company has approved 5-10 specialty pharmaceutical products, added 9 invention patents, and added 1 utility model patent. With the release of production capacity for the company's 720-ton pharmaceutical intermediates and APIs expansion project, long-term development is worth looking forward to.
The company's performance grew steadily. We slightly raised revenue and lowered the expense ratio. We forecast the EPS for 23-24 to be 2.30/2.68 yuan (the original forecast for 23-24 was 2.09/2.44 yuan), and the EPS forecast for the new 25 years was 3.10 yuan.
According to comparable companies, PE was given 23 times the valuation in 2023, with a corresponding target price of 52.90 yuan to maintain the “buy” rating.
Risk warning
Production capacity expansion and digestion progress fell short of expectations, higher upstream raw material costs, CMO/CDMO business development fell short of expectations, risk of exchange rate fluctuations, etc.