Event: the company recently released a positive profit reminder in its semi-annual report of 2023 that it is expected to achieve a net profit of 1.2 billion yuan in the first half of 2023, an increase of 90.77% over the same period last year.
The return profit is higher than expected, and the intermediate / API is driven overseas. The company expects to achieve a substantial increase in net profit of 1.2 billion yuan in the first half of 23, which mainly lies in the rapid growth of intermediates / APIs, especially the steady rise in market prices of related products driven by the rebound in demand represented by overseas markets. at the same time, animal protection business to maintain rapid growth also contributed to considerable increment. Looking forward to the whole year, intermediates / APIs will maintain the trend in the first half of the year, insulin is expected to achieve positive income growth in the second half of the year, antibiotic preparations will maintain steady growth, and veterinary drug business will continue to maintain rapid growth. We expect to maintain high-speed profit growth for the whole year, while the innovative drug business is in full swing, and imitation innovation is expected to contribute new expectations / new increments.
Insulin inflection point is approaching, animal protection is growing rapidly, and GLP-1 is blooming in an all-round way. During the insulin collection, the company is actively expanding the sales of insulin products, looking forward to the second half of the year as the price factors clear, sales rise, insulin business is expected to return to steady growth. The company has formed full coverage in the field of diabetes, covering insulin analogues such as Degu Insulin injection, Degu double Insulin mixed injection and GLP-1 receptor agonists such as Lilarutide injection, among which Simigrutide injection is in I/III phase for diabetes indications and Phase I for weight loss indications. Animal protection business began to force, in the next few years under the continuous development of new customers, new products, will also maintain rapid growth.
Profit forecast and valuation: considering the strong price of APIs / intermediates, insulin collection and other factors, we expect the company's operating income to be 144.37 yuan, 164.39 yuan and 18.565 billion yuan respectively from 2023 to 2025 (the previous forecast for 23-25 is 128.88 yuan, 142.91 yuan and 16.232 billion yuan), an increase of 27.16%, 13.86% and 12.93% respectively over the same period last year. The net profit of homing was 20.95,23.59 and 2.655 billion yuan respectively (the previous forecast for 23-25 was 17.77,19.48 and 2.339 billion yuan), an increase of 32.5%, 12.60% and 12.54% respectively over the same period last year. Maintain a "buy" rating.
Risk hints: the risk that the business sales of APIs and intermediates are not as expected; the risk that the promotion of insulin is not as expected; the market competition is intensified and the sales of insulin products are not up to expectations.