2Q23 ushered in an inflection point in its performance and maintained its buy rating
The company released 23 mid-year reports with revenue of 1.37 billion yuan (- 1.5% yoy), net profit of 480 million yuan (- 59.0% yoy) and non-net profit of 480 million yuan (+ 8.8%yoy), of which 2Q23 revenue + 40.2%yoy and non-net profit + 346.9%yoy. The sharp decline in the home side is mainly due to 1H22's sale of 870 million yuan of Tebao biological shares to confirm investment income, 2Q23 revenue and deduction non-end significant increase mainly due to 5M22 insulin collection and implementation, 2Q22 one-time sterilization circulation link of the original supply price and collection price difference (sterilization impact income 204 million yuan), excluding the impact of 2Q23 income and deduction non-profit is basically the same as the same period last year. Taking into account the implementation of insulin collection, the price decline but the limited increase in sales, we estimate that the 23-25 net profit of homing is 1.490 billion yuan, deducting the non-net profit of 9.83 pounds, 11.59 pounds, respectively, and giving 23-year deduction of non-end 26xPE (comparable company Wind unanimously expects 25x, the leader gives a premium, but competition intensifies), and the target price is 12.82 yuan (the previous value is 13.59 yuan).
The sales volume of the second generation of 1H23 is growing steadily, and the expected sales for the whole year are steadily affected by collection. We speculate that the sales volume of the second generation of 1H23 is growing in single digits, and the annual sales are expected to achieve large single digit growth, but considering the high base of 1-4M22 price, the annual sales are expected to be basically the same. We believe that the market pattern of postharvest insulin remains stable (the collection of biological agents is different from chemical agents, the distribution volume is based on the original market sales volume of enterprises, the volume of new entrants is less, and the follow-up market pattern is expected to focus on domestic leading + major foreign-funded manufacturers. (and relatively stable), the contract reduction is expected to be controllable next year.
It is expected that the volume of glargine will be released rapidly in 23 years, and the premix of 30 + 50 in 24 years is expected to take advantage of the collection contribution increment. We predict that the sales of insulin analogues will increase by ~ 40% in 23 years, of which: 1) insulin glargine: we speculate that 1H23 sales will grow by ~ 30%, and the annual sales are expected to grow by 30% to 40%. Considering the high base of 1-4M22 price, the annual sales are expected to be + ~ 20%. 2) Insulin in asparagus: we speculate that the total sales of 1H23 quick-acting and 30lap50 premixed insulin are ~ 1 million, which is expected to achieve sales of 20-3 million units in the whole year, contributing to income of ~ 100 million yuan. Considering that Mendong 30amp 50 was approved late (11M22 was approved) and did not participate in the sixth batch of collection, we think it is expected to contribute a large increase in the renewal of the contract next year.
The R & D pipeline blossoms at multiple points, and Lilarutide will be approved soon.
The company's R & D pipeline layout is comprehensive: 1) GLP-1 series: Lilaluptide has declared hypoglycemic indication BLA in 7M22, the second home-made one, we expect to be approved by the end of 23; THDBH 120x121 (GLP-1/GIP) hypoglycemic IND;THDBH 110x111 (GLP-1 small molecule) hypoglycemic IND, simigelutide (GLP-1) preclinical 2) URAT1 series: THDBH 130 (URAT1) clinical phase 2 a has completed data locking and unblindness, THDBH 150x151 (XO/URAT1) phase 1 clinical; 3) insulin series: Laiprostine insulin (5M23 clinical phase 3 out group), overspeed dependent adjuvant insulin (phase 1 reached the main end point, phase 3 clinical entry group), soluble glycerine dependent adjuvant diinsulin (German phase 1 clinical), de Gu insulin (9M22 approved clinical).
Risk tips: product sales are not as expected, the risk of product price reduction, R & D progress is not up to expectations.