Teyi Pharmaceutical released the 2023 semi-annual report performance forecast: net profit for the first half of 2023 was 145-155 million yuan, up 135.92%-152.19% year on year; net profit after deducting non-recurring profit and loss was 143-154 million yuan, up 153.88%-173.41% year on year.
Key points of investment
Demand for cough medicine has increased, helping the company recover on the profit side
The company's net profit from H1 in 2023 increased 135.92%-152.19% year-on-year. The high growth rate was mainly affected by the epidemic. Demand for the company's exclusive anti-cough medicine surged, while sales were blocked in Q2 2022 due to the blockade. H1 cough suppressant tablets sold 540 million tablets in 2023, exceeding sales volume for the full year of 2022. In 2019, the company conducted a comprehensive survey on the market coverage rate of cough tablets products. There are still empty markets, and there are also some regions with low market coverage in regions with good coverage. The company strengthened sales in existing markets and opened up empty markets. Relying on the exact curative effects of cough tablets, the sales volume increased significantly.
Sales model transformation empowers the second tier of traditional Chinese medicine
Focusing on cough medicine products, the company has gradually launched products such as monoclonal parasitic particles, blood poison pills for skin diseases, hypoglycemic pills, pudilan anti-inflammatory tablets, Fengyu gastrointestinal health tablets, gingling granules, and Liuwei Dihuang pills. At the same time, the R&D department is vigorously developing upstream medical and aesthetic varieties, forming a better synergistic effect for the company's expansion from drug R&D and production to the field of traditional Chinese medicine and traditional Chinese medicine health consumption. The company's current sales model is a dealer model. The company plans to gradually shift to direct sales, thereby increasing the revenue and enthusiasm of pharmacy terminals, thereby further expanding the company's sales scale.
Profit forecasting
We forecast that the company's 2023E-2025E annual revenue will be 1,183, 13.26, and 1,495 billion yuan, respectively, net profit of 2.51, 3.03, and 358 million yuan, and EPS will be 1.10, 1.32, and 1.56 yuan respectively. The current stock price corresponds to PE 13.6, 11.3, and 9.6 times, respectively, giving a “buy” investment rating.
Risk warning
Risks such as collection risks and sales channel expansion falling short of expectations.