Event: the company issued a half-year performance forecast for 2023. It is estimated that 2023H1 will achieve a net profit of 27 million yuan to 35 million yuan, down 45.38% and 57.87% compared with the same period last year, while deducting non-net profit of 18 million yuan to 26 million yuan, down 65.20% from the same period last year.
The performance is better than the previous month, pay attention to the inflection point of iodine price. The fluctuation of the company's performance in the first half of 2023 mainly comes from: 1) the iodine price of the main raw materials increased significantly compared with the same period last year; 2) collection restricts the transmission of domestic preparation cost pressure to the downstream. From a quarterly point of view, 23Q2 achieved a net profit of 1743-25.43 million yuan in a single quarter, deducting non-net profit of 1054-18.54 million yuan, all from negative to positive over the same period last year, and better growth than 23Q1 (9.57 million yuan and 7.46 million yuan, respectively).
We expect the month-on-month improvement in the company's performance to be mainly due to the gradual recovery of business in all sectors brought about by the recovery of terminal demand after the deregulation of the epidemic, as well as the company's flexible adjustment of shipments under still high raw material costs. Looking forward to the second half of the year, the iodine price is expected to enter the downward channel with the gradual recovery of the supply side of the main upstream suppliers, and the gross profit margin can be improved quarterly; in addition, the release of the epidemic will drive the demand for terminal diagnosis and treatment in hospitals and the continuous recovery of the company's preparation production and shipments. at the same time, the new increment of preparation collection (iodopamol) and the cooperation of API key customers will drive growth. We are optimistic that the iodine contrast agent leader will return to normal profits and continue to grow.
Contrast agent API leading strong Hengqiang, and global manufacturers continue to carry out in-depth cooperation, continuous efforts are worth looking forward to. We believe that under the background of the continuous strengthening of contrast agent API barriers and preparation collection, it is expected that it will be difficult for new entrants to develop on a large scale. As a leading global contrast agent API company, Si Taili will maintain a strong position. With its strong advantage, the company is expected to deepen its cooperation with major original research and imitation pharmaceutical manufacturers at home and abroad, continue to expand the volume of contrast media business, and maintain rapid growth in performance.
Profit forecast and investment advice: according to the performance forecast, considering that the price of upstream raw materials is still high, we adjust our profit forecast and estimate the company's 2023-2025 revenue of 24.39,29.96 and 3.699 billion yuan (before adjustment, 26.27,31.93 and 3.913 billion yuan), an increase of 14.4%, 22.9% and 23.4% year-on-year. The net profit of homing was 1.51,3.04 and 425 million yuan (2.96,4.16 and 582 million yuan before adjustment), up 298.7%, 102.0% and 39.7% over the same period last year.
The current share price corresponds to 23-25 PE times 38-19-13. Considering that the company is in a contrast medium industry with rapid demand development and good competition, although the iodine price of the main raw material is currently at a historical high, it is expected to enter the downward channel with the recovery of the supply side to drive profitability to pick up, superimposing its own capacity release and the sustained and rapid growth of preparations and CDMO harvests to maintain the "buy" rating.
Risk tips: environmental risk; quality risk; the risk of order loss caused by competition with customers; the risk of rising raw material prices; the risk that the progress of product approval is lower than expected; the risk of public information lagging behind or not updated in a timely manner.