Performance is growing rapidly, and domestic and foreign markets are progressing hand in hand:
The company's revenue for the full year of 2022 was RMB 11.334 billion, up 16.8% year on year, net profit of RMB 1.54 billion, up 60.8% year on year. The company's overall pharmaceutical product revenue rose 13.0% year on year to RMB 4.56 billion, segment profit margin was 17.5%, of which human insulin revenue was 662 million yuan, sales increased 8.8%. Insulin analogues (ginseng insulin, Mendon and Mendon insulin) earned 514 million yuan, sales increased 87.3% year on year, sales increased 87.3% year on year. In May 2022, the company's people Insulin and insulin analogs are covered by national health insurance, with a two-year cycle. Revenue from antibiotic products (including animal insurance) increased 32.9% year-on-year to $3,063 million, with revenue from tazoxine and amoxene rising 10.0% and 14.7% respectively.
The company mainly deals in economic and partner insurance products with the Inner Mongolia Federal Animal Insurance Pharmaceutical Company, integrating “research, production and marketing”. Revenue increased 106.1% year-on-year to RMB 797 million. The intermediary medicine business was hampered by unstable production capacity and high upstream energy and transportation costs. Sales fell 5.9%, and gross margin was around 26%. API revenue rose 30.4% to RMB 5.175 billion, with a gross profit margin of around 17%. The domestic and overseas markets as a whole showed a healthy trend of rapid domestic business growth and balanced development of international business in various regions. In terms of costs, due to the impact of the epidemic and supply chain costs, Hong Kong dollar financing costs rose rapidly due to the combined US dollar interest rate hike, and the company achieved effective cost coverage under the driving strategy of incremental price increases on the sales side of some major products.
Focusing on the field of diabetes, we are developing a rich pipeline of new products:
In terms of diabetes pipelines, liraglutide and Tokutani insulin have entered phase III clinical trial and are expected to be marketed in 2024 and 2025, respectively. The diabetes indications of Tokutani Mendon Insulin and Smeglotide have entered clinical trials. The weight management indications of smeaglutide were accepted for clinical registration in February 2023, and clinical approval was granted on April 17. TUL01101 tablets, a new class of drugs to treat rheumatoid arthritis, are undergoing clinical phase Ib. Indications for atopic dermatitis have been declared clinically. At the same time, TUL01101 ointment (atopic dermatitis) and TUL12101 eye drops (dry eye) have both entered clinical phase I, and were approved for IND in October 2022 and March 2023, respectively. There are already 21 independent research projects in the field of animal insurance drugs. Of these, 6 have applied for registration, all of which will be marketed this year and next two years. The company has a comprehensive R&D platform layout. Through the establishment of Federal Biotechnology (Hengqin, Zhuhai), it focused on biological research and development. In 2022, it invested 594 million yuan in R&D, an increase of 27.6% over the previous year.
Another coverage gave a buying rating, with a target price of HK$8.94
The company continues to increase investment in R&D and is developing a rich product line. Core products will continue to grow rapidly. The company's revenue for 2023-2024 is expected to be RMB 12.106 billion and RMB 13.557 billion respectively, and EPS will be RMB 0.93 and RMB 1.03 respectively, giving the company 8.65 times PE in 2023. The corresponding target price is HK$8.94, with room for 30.0% increase from the current price, giving it a “buy” rating.