Tonghua Dongbao released its mid-2023 report: the company's operating income in the first half of 2023 was 1.366 billion yuan,-1.5% compared with the same period last year; its net profit was 485 million yuan,-59.0% from the same period last year; and 480 million yuan was deducted from non-parent net profit, + 8.8% from the same period last year. 23Q2's single-quarter operating income is 701 million yuan, year-on-year + 40.2%, month-on-month + 5.4%; return-to-mother net profit 234 million yuan, year-on-year-33.3%, month-on-month-6.4%; deduction of non-return net profit 233 million yuan, year-on-year + 346.9%, month-on-month-5.7%.
Revenue side: the sales volume of products is increasing and the market share is further expanding. Tonghua Dongbao 23Q2 single-quarter operating income compared with the same period last year + 40.2%, month-on-month + 5.4%, has shown a sustained growth trend after insulin collection. The company's insulin sales have grown steadily, ranking first in the country in market share, surpassing Novo-Nordisk A/S in market share to 44.6%. The sales of insulin analogues have maintained rapid growth, and the market share of glargine insulin has continued to expand rapidly, with a market share of 7.7%. Mendong and premixed insulin are in the stage of rapid release after listing, which constitutes the driving force for continuous growth.
Profit side: clear inflection point after collection, and strengthen the promotion and sales of new products. From the point of view of gross profit margin, the gross profit margin of the company's 23Q2 is 77.5%, which is basically the same as that of 23Q1, and the impact of collection on prices has been eliminated. The sales expense rate of 23Q2 company is 31.9%, which is 5.5% higher than that of 23Q1. This is mainly due to the rapid release of insulin after listing and the increase in sales investment. The management expense rate of 23Q2 is 5.7%, which is 0.5% lower than that of 23Q1. 23Q2's R & D spending rate is 2.4%, 1.8% lower than that of 23Q1. Judging from the net profit level of Q2 deducting non-return in a single quarter, it is + 346.9% compared with the same period last year, and the inflection point of post-harvest profit has arrived.
For metabolic diseases related areas of research and development, pipeline asymptotic harvest. The company continues to promote research and development, diabetes in the field of Lilaru peptide has been declared on the market, Laipro 25R and overspeed-acting liprol insulin in the III phase clinical phase, soluble glycerine propranolol double insulin, de Gu insulin into the phase I clinical. Both GLP-1/GIP double receptor agonists and oral small molecule GLP-1RA in the field of diabetes / weight loss / NASH are in the IND stage. In the field of gout and hyperuricemia, the phase IIa clinical trial of a new drug URAT1 inhibitor has completed database locking and blindness, and the first phase I clinical trial of THDBH151, the first dual-target gout inhibitor made in China, has completed the first subject in the group. The company's pipeline is advancing in an orderly manner and the harvest is approaching.
Maintain the "highly recommended" investment rating. We are optimistic about the growth of the company's insulin and the promotion of the innovation pipeline. It is estimated that the company's return net profit in 2023-25 is 10.5,13.1 and 1.64 billion yuan respectively, which is-34%, + 25% and + 25% compared with the same period last year, and the corresponding PE is 19, 15 and 12 respectively, maintaining the "highly recommended" investment rating.
Risk hints: research and development is less than expected risk, sales is less than expected risk, collection and acquisition price reduction uncertainty risk, competition intensification risk and so on.