Incident: The company released its report for the third quarter of 2022, achieving revenue of 1.82 billion yuan (+15.7%) in the first three quarters; achieving net profit of 4.6 billion yuan (+45.1%); net profit of return to the mother after deduction of 450 million yuan (+49.1%). The third quarter alone achieved revenue of 590 million yuan (+5.8%); realized net profit of 160 million yuan (+76.4%); net profit of the mother after deduction was 160 million yuan (+90.9%).
Continued focus on the pharmaceutical industry, with steady growth in performance. At present, the company is gradually implementing the reform of the state-owned assets management system. The company has divested its chemical business and environmental protection business. In the future, the company will continue to focus on the pharmaceutical industry. Dyne Pharmaceutical, a core subsidiary in 2022 Q3, achieved operating income of 530 million yuan (+33.6%) and net profit of 240 million yuan (+68.8%).
The company's gross margin for the third quarter was 80%, and the net interest rate was 47.6%.
The main product, Ecoxon, is driving a strong increase in performance. 1) Expansion of the applicable population: According to evidence-based medical evidence and adapted to children's health consumption needs, starting January 1, 2022, the age of use of Ecoxin expanded from 0-3 years old to 0-6 years old, and the market space was further expanded. 2) Price increase: The 30-capsule package is Icoxin's main product and accounts for the largest share of sales volume. The price will increase by 6.4% from July 15, 2022. Market acceptance conditions such as dealer orders and terminal delivery are in line with expectations. 3) Strengthen channel layout: Enrich and improve product supply channels, collaborate online and offline to facilitate consumer purchases. 4) Consumer education: Dyne Pharmaceutical adheres to professional and authoritative academic promotion, continuously enhances its brand power, and is committed to spreading scientific knowledge about child health and parenting through filming popular science videos and hosting welfare activities to establish a professional image of child health experts.
Second-tier varieties continue to be abundant, and there is sufficient momentum for performance growth. Dyne Pharmaceutical has continued to achieve results in product development, and has obtained new registered drugs every year in recent years. New products have been launched one after another, bringing new growth contributions to the company.
Dyne Pharmaceutical's children's pharmaceuticals have been developed with Icoxin as the lead, including iDexin, Ijiaxin, Gedixin, Iganxin, Shu Tongxin, Yiziyou, pediatric ibuprofen suppositories, oral rehydration salts, and oral desloratadine liquid.
Profit forecasts and investment recommendations. The company's EPS for 2022-2024 is expected to be 2.18 yuan, 2.79 yuan, and 3.48 yuan respectively. The net profit returned to the mother will maintain a compound growth rate of 29% over the next three years, maintaining the “buy” rating.
Risk warning: sales fall short of expectations; risk of collection; risk of products under development falling short of expectations.