The company released its semi-annual report for 2023: in the first half of 2023, it achieved operating income of 709 million yuan, net profit of 143 million yuan, net profit of non-return income of 104 million yuan, and year-on-year increases of -28.45%, -35.23%, and -45.68%, respectively. Among them, the second quarter of 2023 achieved revenue of 448 million yuan, net profit of 87 million yuan, net profit of non-return income of 68 million yuan, year-on-year increases of -8.65%, -24.82%, and -33.25%, respectively, and +71.82%, +53.90%, and +57.51% over the previous year.
The aftershocks of the pandemic put short-term pressure on performance, and Q2 improved month-on-month. COVID-19 had an adverse impact on the company's pulping supply in the second half of 2022. As a result, the number of products that could be sold in the first half of 2023 was limited, and overall business performance was under pressure in the short term. 2023Q2 has improved markedly compared to Q1 (operating income, net profit, and non-return net profit increased by +71.82%, +53.90%, and +57.51%, respectively). The plasma collection end fully recovered in the first half of the year (nearly 550 tons), and the corresponding performance for the second half of the year is expected to accelerate significantly.
After the epidemic recovery+the volume of new pulp stations, the annual pulp volume is expected to break through the kiloton mark. At present, the company has a total of 38 plasma stations, which currently rank among the top three in the industry; among them, Guangdong Shuanglin has 19 single plasma collection stations (17 are being collected +2 are awaiting inspection), and Pacifico has 19 single plasma collection stations (14 in the process of collection plus 5 awaiting inspection). The Pasifikobayan Pulp Station received a “Single Plasma Collection Permit” in August 2023. The collection area includes Bayan County, Tonghe County, and Mulan County, covering a population of over 770,000 people, and has a lot of potential for pulp collection. The rest of the pulp stations will complete inspection and begin pulping in 2023. With the combined impetus of post-epidemic recovery and the volume released at the new pulp station, we expect the company's pulping volume to enter a period of rapid growth.
Product development and channel expansion continue to advance. In terms of products, Guangdong Shuanglin PCC was approved for listing during the reporting period, and the product portfolio was broadened. On the channel, Guangdong Shuanglin Jingbing obtained a drug registration certificate from Pakistan.
Previously, the company had achieved overseas emergency export sales of various products in Southeast Asia, South America and some countries in the Middle East. This certification will help long-term exports to Pakistan. At the same time, Guangdong Shuanglin has joined BRAINFARMA IND, a pharmaceutical sector subsidiary of Hypera Pharma, one of Brazil's largest pharmaceutical production, distribution and retail giants? STRIA QU? MICA E FARMAC? UTICA S.A. has signed an “Exclusive License and Supply Agreement” and is currently actively promoting the registration and registration of Brazilian market regulations.
Profit forecast and investment advice: We believe that the performance shortfall caused by the aftershocks of the pandemic has been exhausted and that there will be an inflection point in the second half of the year. At the same time, due to market concerns about performance fluctuations and management changes, and stock prices have been fully adjusted, the market value of tonnes of pulp is the lowest in the industry, giving it a “increase in holdings” rating. Profit for 2023-2025 is estimated to be 4.9/71/8.2 billion yuan, respectively, corresponding to PE26/18/16x.
Risk warning: Management changes, increased competition for factor-based products, expansion of new pulp stations falling short of expectations, etc.