Events: the company released its semi-annual report of 2023, with operating income of 150 million yuan, year-on-year-85.89%, net profit of 108 million yuan, year-on-year-63.71%, non-return net profit of 58 million yuan, year-on-year-78.23%, operating net cash flow of 389 million yuan, from negative to positive; EPS (basic) 0.18 yuan. Performance is in line with market expectations.

Comments:

The delay in the issuance of approval affects the pace of performance release, and the sales payback situation has been greatly improved: 2023Q1~Q2, the company's quarterly operating income was 145,000,000 yuan respectively, compared with the same period last year, which was + 892.96% and 99.54% respectively; the net profit of return to the parent was RMB 0.94 million, reversing losses / 95.23% compared with the same period last year; deducting the non-return net profit of RMB 0.68 trillion, reversing losses / losses compared with the same period last year. 2023Q1, there is a high incidence of influenza An epidemic in many places across the country. At the end of 2022, some of the influenza vaccines in stock of the company achieved sales, and Q1 sales increased significantly compared with the same period last year. Due to the change of influenza strains in the Northern Hemisphere in 2023 and other factors, the product approval of domestic influenza vaccine enterprises, including the company, was delayed by more than one month in 2023 compared with the previous year, which had a great impact on the company's operating results in the second quarter of 2023. The issuance time of domestic influenza vaccine approval is later than that of last year. A total of 64 batches of tetravalent influenza vaccines were issued in the first half of 2022, and the sales of influenza vaccines were started at the same time. In the first half of 2023, the company issued 3 batches of tetravalent influenza vaccines, and the product sales were concentrated in the second half of the year. As a result, the sales and revenue of influenza vaccines decreased significantly during the reporting period compared with the same period last year. The significant improvement in operating net cash flow was mainly due to the increase in sales rebates. 2023H1 received 995 million yuan in cash for selling goods and providing services, which was + 68.87% compared with the same period last year.

Steadily advance the research and development work and enrich the echelon of vaccine products. In February 2023, the company successively obtained the "Drug Registration Certificate" of freeze-dried human rabies vaccine (Vero cells) and adsorbed tetanus vaccine, and the product structure was further enriched. The freeze-dried group A meningococcal conjugate vaccine has completed the phase III clinical trial and is expected to apply for production in 2023, while the adsorbed acellular 100% (three-component) diphtheria tetanus combined vaccine is expected to carry out the phase III clinical trial in 2023. With the steady progress of R & D work, the company's product echelon will continue to be rich in the future, laying a solid foundation for long-term development.

Profit forecast, valuation and rating: maintain the forecast company's 2023-2025 homing net profit of RMB 956 million, compared with the same period last year. + 83.90%, 32.10%, 27.87%, 2.69 yuan, respectively, according to the latest equity estimate, and the current price corresponding to PE is 18-14-11, respectively, maintaining the "buy" rating.

Risk tips: the risk of batch issuance is lower than expected; the risk that people's willingness to vaccinate is lower than expected; the risk of deterioration of the competition pattern.