Event: the company released its semi-annual report for 2023, with an operating income of 1.37 billion yuan (+ 9.8%), a net profit of 80 million yuan (+ 7.5%) belonging to the shareholders of the parent company, and a net profit of 70 million yuan (+ 33.4%) belonging to the shareholders of the listed company after deducting non-recurring profits and losses.
The continuous and rapid release of cyclopropofol has made steady progress in overseas clinical practice. Cyclopropofol is the first class 1.1 innovative intravenous anesthetics independently developed in China, and its market share has ranked Top3 in the same market. As of 2023Q1, the market share of cyclopropofol has increased from 2.3% of Q1 in 2022 to 8.4%, surpassing medium / long-chain propofol and far surpassing other innovative drugs of the same kind on the market in the same period. In June, the number exceeded 900000, a record high. The first American phase Ⅲ clinical trial of HSK3486 (cyclopropofol injection) anesthesia induction (IGA) indications has reached the main end point, and the second phase Ⅲ clinical trial is under way. A third phase Ⅲ clinical trial is expected to be conducted in both the United States and Europe this year and is expected to be submitted to NDA in 2024.
Innovative drugs gradually enter the harvest period, and commercial cooperation fills the product pipeline. The company's R & D investment continues to increase. H1 R & D investment reached 370 million yuan (+ 7.3%) in 2023, accounting for 27.2% of the operating income. By the end of 2023H1, the company's 9 Class 1 innovative drug products have entered the clinical stage. Long-acting hypoglycemic drugs (HSK7653) were declared as NDA in January 2023. Neuralgia drugs (HSK16149) indications for Diabetic Peripheral Neuralgia have been declared in October 2022 for NDA; indications for post-herpetic neuralgia. Phase Ⅲ clinical trials have been completed and will be submitted to NDA in the near future. Phase Ⅱ clinical trials of adjuvant analgesia are progressing smoothly. Postoperative analgesic drugs (HSK21542) have recently submitted an application for NDA, and the clinical Ⅲ phase study of pruritus indications for chronic kidney disease is progressing smoothly. Respiratory system drugs (HSK31858) and metabolic system drugs (HSK31679) are progressing smoothly in the clinical phase of Ⅱ in China. In 2022, the company entered into a cooperation with Aquestive of the United States on riluzole oral membrane product for the treatment of ALS, which is responsible for the registration and commercialization of this product in China. The application for riluzole oral membrane NDA was submitted in May 2023.
Profit forecast and investment advice: the company's innovative drugs have entered the harvest period, and a number of indications of cyclopropofol have been approved for listing, which is expected to contribute to greater performance flexibility. at the same time, the company has rich reserves of innovative varieties and sufficient driving force for long-term growth.
It is estimated that the company's net profit from 2023 to 2025 will be 310 million yuan, 400 million yuan and 540 million yuan, corresponding to 76 times, 58 times and 43 times of PE respectively, maintaining a "buy" rating.
Risk hints: market competition risk, drug price downward risk, new drug research and development risk.