occurrences
On August 24, 2023, the company announced that revenue for the first half of 2023 was 588 million yuan, +17.41% year-on-year, and attributed/non-net profit of 1.09/105 million yuan, -2.29%/+10.57% year-on-year. Revenue for the second quarter of 2023 was 283 million yuan, +12.13% year on year; attributed/non-net profit was 0.39/35 million yuan, -24.54%/+1.85% year on year. Performance was in line with expectations.
reviews
Sales of APIs and formulations are rapidly increasing, the advantages of large single products are gradually showing, and projects under construction are progressing steadily. (1) Product sales revenue was 5.3 billion yuan, +16.68% year on year: API product revenue was 442 million yuan, +12.44% year on year. Of these, revenue from antiviral products was +185.38%, mainly due to an increase in customer demand for oseltamivir APIs. Revenue from pharmaceutical products was 84 million yuan, +45.53% year-on-year. Of these, the seventh batch of micafensin sodium for injection won the bid in 2022. The winning bid price was 134.43 yuan/box, and the agreed purchase volume base for the first year was 110,000 boxes. (2) Projects under construction: In the environmental protection completion and acceptance of the Taixing Phase I project, entecavir APIs and oseltamivir phosphate APIs have passed GMP certification by the Drug Administration; pre-trial production materials for the Taixing Phase II project have been prepared and are being submitted. The planned production capacity of the first phase of the Borui project is 1,600 kg, and the conditions for trial production have been met.
Innovative research and development focuses on tumor immunization and targeted therapy, and enhances competitiveness in the field of generic drug respiratory inhalation. R&D expenses were 103 million yuan, +10.16% year on year: (1) The innovative drug terminal CD44PDC is in phase I clinical trials and is currently in the 7th dose group (175 mg/m?) Dose climbing studies were conducted, and efficacy signals were observed in various tumors, including colorectal cancer and cervix. At the same time, at 125 mg/m? Dose levels A dose expansion study was conducted, and 3 subjects were enrolled in the drug administration group. The GLP-1/GIP dual agonist has completed phase I clinical trials. The safety and tolerability are good. The average body weight during the follow-up at the 2.5-15 mg dose (day 8/15) decreased by 3.24% to 8.30% compared to the baseline period. Currently, both weight loss and type 2 diabetes treatment have obtained ethical approval for phase II clinical trials. (2) The development progress of multiple generic drug-side products is progressing steadily. Everolimus tablets have been declared domestically, carboxymaltose iron injection, budesonide suspension for inhalation, and iopromide injection are in the stability stage, tiotropium audaterol inhalation spray is in the process verification stage, tiotropium bromide inhalation spray and salmetteroticasone inhalation powder are in the pilot phase. The small trial of tiotropium bromide inhalation powder has been completed.
Profit Forecasts, Valuations, and Ratings
We raised our profit forecast. We expect 2023/24/25 revenue of 12/14/1.6 billion yuan, net profit to parent; net profit to parent of 2.5/29/350 million yuan. Maintain a “buy” rating.
Risk warning
There are risks such as product sales growth falling short of expectations, production capacity investment falling short of expectations, and development of innovative drugs falling short of expectations.