Core views:
The company released its semi-annual report for 2023: the company achieved revenue of 1,785 million yuan (yoy +1.13%) in the first half of the year, net profit of 184 million yuan (yoy +9.23%), net profit of 173 million yuan (yoy +6.21%) after deducting non-net profit of 173 million yuan (yoy +6.21%). A single Q2 revenue was $935 million (yoy +5.56%), net profit at the parent level was $134 million (yoy +17.91%), after deducting non-net profit of $131 million (yoy +19.54%). Net operating cash flow for Q2 was $105 million, an increase of $198 million over Q1.
The nuclear drug business resumed rapid growth after the epidemic. By business: (1) The company's nuclear drug business revenue in the first half of the year was 502 million yuan (yoy +19.18), the core product 18F-FDG revenue was 215 million yuan (yoy +18.48%), Yunke injection revenue was 124 million yuan (yoy +22.66%), and iodine-sealed seed source revenue was 83 million yuan (yoy +51.28%); (2) API business revenue was 953 million yuan (yoy -1,185%), mainly due to the decline in revenue from the key product heparin API, in the first half of the year. yoy -14.94%). (3) Revenue from the formulation business was 263 million yuan (yoy +18.44%), and injectable sodium hydrocortisone succinate grew rapidly, with revenue of 74 million yuan (yoy +325%) in the first half of the year; nadroparin calcium injections won the bid for the eighth batch of national collection, and revenue declined somewhat.
Accelerate the pace of nuclear pharmacy layout and continuously enrich the nuclear drug research and development pipeline. The company's 2 positron nuclear pharmacies were put into operation in the first half of the year. Currently, 8 positron nuclear pharmacies are under construction. It is expected that by the end of 2023, the company will have more than 30 nuclear pharmacies in operation, and the networked production layout of nuclear pharmacies will be further improved. The company has a rich R&D echelon, and has formed a full industry chain layout from diagnosis to therapeutic nuclear drugs.
Lan Nacheng, its innovative nuclear drug business platform, is developing more diagnostic and therapeutic nuclide drugs and nanomedicines. In the first half of the year, phase I clinical trials of fluoxetastin injections were completed, and patients were enrolled in phase I clinical trials with fluorofilostatin injections. The company's nuclear drug product pipeline continues to be enriched.
Profit forecasts and investment recommendations. We expect EPS to be 0.49, 0.59, and 0.69 yuan/share in 23-25. Referring to comparable company valuations, we give the company 35 times PE valuation in 23 years. The corresponding reasonable value is 17.31 yuan/share, maintaining the “buy” rating.
Risk warning. Nuclear pharmacy expansion has fallen short of expectations, research and development of products under development has fallen short of expectations, and goodwill accounts for a high proportion of total assets.