Core views:
The company released the first quarter report of 2023: in Q1 2023, the company achieved revenue of 10.871 billion yuan, an increase of 4.68% over the previous year; the net profit of the mother was 997 million yuan, an increase of 116.17% over the previous year; after deducting non-net profit of 919 million yuan, an increase of 14.78% over the previous year. The company's non-recurring profit and loss in Q1 2023 was 68 million yuan, an increase of 412 million yuan over the previous year, which led to a significant increase in the company's net profit attributable to its mother.
Investment in R&D continues to be increased, and the product structure of the pharmaceutical business is continuously optimized. In Q1 2023, the company's R&D expenses were 969 million yuan, an increase of 19.66% over the previous year; the R&D expenditure rate was 8.91%, an increase of 1.12 pcts over the previous year. The company's revenue and profit growth was mainly due to increased sales of new and sub-novel drugs such as Hans Sang, Han Qu You, Su Kexin, and Jiebeian, and the proportion of new drugs in the company's drug sales continued to increase.
Innovative drugs are continuously developed and implemented, and commercialized sales promote revenue growth. (1) A new ES-SCLC indication was approved for Hans form, making it the first PD-1 monoclonal antibody approved for first-line treatment of ES-SCLC in the world; Hans's listing application in the EU has also been accepted. (2) Keplast hydrochloride tablets have been approved for marketing in China to treat duodenal ulcers and reflux esophagitis. (3) Han Qu You BLA was accepted by the US FDA, and the listing application for RT002 to improve moderate to severe frown lines was accepted by the NMPA. (4) The company has also initiated phase III clinical trials or made breakthrough progress in the phase III clinical phase of several new drugs. As these products are developed and implemented, they will promote the continuous growth of the company's revenue and continuous optimization of the revenue structure.
Profit forecasts and investment recommendations. We expect the company's EPS for 2023-2025 to be 1.75 yuan/share, 2.03 yuan/share, and 2.36 yuan/share, respectively. Referring to comparable company valuations, A shares were given 25 times PE valuation in 2023, corresponding to a reasonable value of about 43.83 yuan/share; H shares were given 15 times PE valuation in 2023. The corresponding reasonable value was HK$30.02 per share, maintaining the “buy” rating for A+H shares.
Risk warning. The development progress of innovative drugs fell short of expectations, sales of new drugs fell short of expectations after they were marketed, and the price reduction in drug collection exceeded expectations