Main points of investment
The proportion of 2023H1 innovative drug revenue continues to increase, and it is optimistic that the company's performance will maintain high growth under the condition that the collection of innovative drugs has hit bottom and the superimposed innovative drugs have been accelerated.
Performance: benefit from fair value income from asset disposal and investment, profit increased significantly 2023H1 performance: realized income 3.379 billion (YOY25.2%), return to the mother net profit of 2.275 billion yuan, a substantial increase over the same period last year. The substantial increase in homing net profit was mainly due to the change in the fair value of the investment portfolio of 1.149 billion yuan and the disposal of subsidiaries of 789 million yuan.
Nerve short-term pressure, auto-immune tumor continues to release, high growth of new drugs from the field of indications, 2023H1 nervous system field income 1.055 billion (YOY-1.5%), we expect to be mainly due to the short-term pressure on sales caused by the negotiation of health insurance renewal in January 2023, we are still optimistic about the trend of rapid release of new drugs when the stroke field does not meet the clinical demand. Oncology revenue of 783 million yuan (YOY34.8%), we expect to be mainly the core innovative drug products Endu, Envida, troxil continuous volume drive. Autoimmune sector income of 659 million (YOY30.0%), we expect to be mainly driven by the high growth of the innovative drug Elamod.
The company's innovative drug revenue reached 2.413 billion yuan (YOY36.6%), and the proportion of innovative drug revenue reached 71.4%, up from 65.3% at the end of 2022. We are still optimistic that the company's innovative drug sector revenue will maintain a high growth rate driven by the continuous volume of Endu, Elamod, Xianbixin, Tracy and so on, and the proportion of innovative drugs will continue to increase.
Prospect: it is optimistic that the collection will hit bottom, and the realization of new drugs is expected to accelerate.
Generic drugs: the impact of collection gradually hit the bottom. From 2020 to 2021, the core pharmaceutical products pemetrexed disodium, amoxicillin and rosuvastatin calcium were negatively affected by collection (not winning the bid), and the sales of Edaravone injection were removed from health insurance. We expect the above effects to gradually bottom out after 2023, and the company's generic drug sector is expected to maintain steady development.
Innovative drugs: commercial ability has been verified, cash is expected to accelerate. Based on the full verification of the commercialization ability of innovative drug products in the fields of nerve (Xianbexin), oncology (Endu, Envoli) and autoimmunity (Elamod), the stock products will continue to be released after 2023. The incremental innovative drug Xianbixin sublingual tablets (stroke), Suvesida monoclonal antibody (gynecological tumor), Dalilesen (insomnia drug) and other products have been put on the market one after another. The company is still expected to achieve a sustained breakthrough in innovative drug sales.
Profit forecast and valuation
Considering that the income of the company's 2023H1 disposal subsidiary has a significant positive contribution to the net profit for the whole year and exceeds our profit forecast, we raise the company's 2023 performance forecast. However, considering that the previous report is relatively optimistic about the sales forecast of Xenoxin (new crown drug), we downgrade the sales forecast of Sinoxin. We expect the company's EPS to be 0.64,0.66 and 0.75 yuan per share in 2023-2025 (the previous forecast is 0.56,0.77 and 0.85 yuan per share in 2023-2025), and the closing price on August 22, 2023 corresponds to 9 times the PE in 2023 (corresponding to 9 times the PE in 2024), maintaining a "buy".
Risk hint
Clinical failure risk, competitive risk, undersold risk, policy risk, measurement risk