Event: the company released its annual report in 2022, with an income of 2.34 billion yuan (+ 15.5%) in 2022, a net profit of 530 million yuan (+ 38.6%), and a net profit of 530 million yuan (+ 48.5%).
Continue to focus on the main pharmaceutical industry, steady growth in performance. According to the split in a single quarter, the revenue of Q1/Q2/Q3/Q4 in 2022 was 6.1%, 6.2% and 590 million yuan respectively, corresponding to a year-on-year growth rate of 23.7%, 18.7%, 5.8% and 14.9% respectively. In 2022, Q1/Q2/Q3/Q4 achieved a net profit of 1.6 million yuan respectively, corresponding to a year-on-year growth rate of 43.2%, 23.6%, 76.4%, 4.7%, respectively. The company has gradually implemented the reform of the state-owned assets management system, the company has spun off the chemical business and environmental protection business, the company will continue to focus on the main pharmaceutical industry in the future. In 2022, the pharmaceutical business accounted for 87.2% of the company's total revenue, and the profits from the core subsidiary Dain Pharmaceutical accounted for 96.2% of the net profits of shareholders of listed companies. The increase in revenue and net profit of Dain Pharmaceutical is mainly due to the increase in sales of Ikexin vitamin AD drops, while the sales of dextran crisp iron granules, vitamin D drops, compound calcium carbonate effervescent granules and other products newly promoted in the past two years have also increased greatly compared with the same period last year.
The performance of the main product Yike Xin has increased, and the market penetration has improved significantly. 1) the applicable population is expanded: according to the evidence of evidence-based medicine, to meet the needs of children's health consumption, from January 1, 2022, the age of ikexin use has expanded from 0-3 years old to 0-6 years old, and the market space has been further expanded. 2) Price increase: 30 pill packaging is the main and largest sales regulation of Ikexin, raising the price by 6.4% from July 15, 2022. Dealer orders, terminal pick-up and other market acceptance is in line with expectations. 3) strengthen the channel layout: enrich and improve the product supply channels, and work together online and offline to provide convenience for consumers. 4) Consumer education:
Adhere to the academic promotion of professional authority, continue to improve the strength of the brand, through shooting popular science videos, holding public welfare activities, etc., committed to the dissemination of scientific child health, parenting knowledge, and establish a professional image of child health experts.
The second-line varieties continue to be rich, and the distribution of pediatric drugs will be improved. Dain Pharmaceutical has formed children's drugs led by Ikexin, including vitamin D drops, dextran iron granules, compound calcium carbonate effervescent granules, licorice zinc granules, oral rehydration salt powder, rifaximin dry suspension, infantile ibuprofen suppositories and desloratadine oral liquid and other children's drugs. By the end of 2022, Dain Pharmaceutical has studied more than 40 special specifications and dosage forms for children, covering common pediatric diseases, frequently-occurring diseases, rare diseases and other fields.
Profit forecast and investment advice. It is estimated that the net profit from 2023 to 2025 will be 690 million yuan, 860 million yuan and 1.07 billion yuan respectively, corresponding to a year-on-year growth rate of 31.5%, 24.6% and 23.8%, maintaining the "buy" rating.
Risk tips: sales are not as expected; collection risk; risk that the progress of the product under development is not as expected.