Revenue has grown rapidly, and various expense rates have declined slightly. In the first half of 2023, Sansei Pharmaceutical achieved revenue of 3,784 million yuan (+22.3%), gross profit of 3.02 billion yuan (+24.8%), net profit of 981 million yuan (+1.4%), and normalized net profit of 1,191 million yuan (+20.1%). Business segments such as biopharmaceuticals, hair health, and CDMO have all achieved rapid growth. In the first half of the year, the company's R&D expenses were 307 million yuan (+4.2%), with an R&D cost rate of 8.1% (-1.4pct); sales expenses of 1,375 million yuan (+19.5%), with a sales expenses rate of 36.3% (-0.8 pct); management expenses of 214 million yuan (+9.9%), with a management cost rate of 5.7% (-0.6pct). The company's various expense rates were reasonably controlled, and there was a slight decrease over the previous year.
Tebi Australia, Yisaipu, and Mandi achieved rapid growth. Tebiao sold 2,019 billion yuan (+28.2%) in the first half of the year, and sales increased rapidly. The ITP indications for children with chronic liver disease have been submitted for marketing. Patients with thrombocytopenia associated with chronic liver disease also completed patient enrollment in the first half of the year. Subsequent expansion of indications will increase the number of people covered by Tebiao. In the first half of the year, irubin (Ibio & Cybor) sold 463 million yuan (-13.1%), and the decline in sales was mainly affected by some regional alliances. Yisaipu sold 304 million yuan (+25.0%) in the first half of the year, and the approved launch of the pre-filled dosage form is expected to be one of the future growth drivers. Mandy sold 496 million yuan (+35.3%) in the first half of the year, continuing the rapid growth trend. E-commerce revenue increased 64% year-on-year in the first half of the year, which is the core driving force behind Mandy's growth.
The R&D pipeline is rich, and self-exempt products have entered the harvest period. Sansei Guojian, a subsidiary of Sansei Pharmaceutical, focuses on the development of self-exempt drugs. The core pipeline 608 (IL17A monoclonal antibody) for psoriasis indications has completed patient enrollment. It is expected that the main endpoint data will be read out in the second half of the year and the NDA will be submitted in 2024.
Phase 2 clinical data for atopic dermatitis has been read for 611 (IL4R monoclonal antibody), and phase 3 clinical trials are expected in 2024. 613 (IL-1beta monoclonal antibody) and 610 (IL5 monoclonal antibody) are expected to enter phase 3 clinical phase in 2024, and the company's self-exemption pipeline will enter a harvest period. In addition to this, clachoterone cream introduced from Cosmo is undergoing bridging clinical trials in China, and is expected to become the first AR inhibitor for acne vulgaris to be marketed in China.
Risk warning: Innovative drug development has failed or progress has fallen short of expectations; price cuts for core products have exceeded expectations.
Investment advice: Maintain a “buy” rating.
Maintaining the profit forecast, the company's net profit is expected to be 21.3/23.7/2.63 billion yuan in 2023-2025, an increase of 11.2%/11.2%/11.0% over the previous year. The current stock price corresponds to PE = 7.9/7.1/6.4x. The company is doing well, valuations are low, and the R&D pipeline is about to enter a harvest period, maintaining a “buy” rating.