Incidents:
On August 28, 2023, Eling Pharmaceutical released its semi-annual report for 2023: in the first half of 2023, the company achieved revenue of 6.791 billion yuan, yoy was 21.99%; realized net profit of 1,606 billion yuan, yoy was 53.16%. After deducting non-attributable net profit of 1,540 million yuan, YOY was 46.67%.
Investment highlights:
The company's products cover many fields, and there is plenty of momentum for long-term growth. The company is driving the industrialization of traditional Chinese medicine through innovation in network pathology, using modern high-tech technology to develop traditional Chinese medicine and chemical medicine, and has developed more than ten new drugs with national patents, covering major diseases such as cardiovascular and cerebrovascular diseases, respiratory diseases, tumors, diabetes, nervous system, and urological diseases. The product layout is complete and the hierarchy is reasonable, laying a solid foundation for the company's future development. The company's leading products are all exclusive products, unique formulations, and have a unique academic position and market position in the field of cardiovascular oral proprietary Chinese medicines.
Academic promotion capabilities are strong, and multiple products have entered expert guidelines and clinical consensus. Products such as Tongxinluo capsules, Shensong Yangxin capsules, Qiqi Qiangxin capsules, and Jinlida granules have been included and recommended many times in clinical guidelines and expert consensus, laying a good foundation for the company's products to better serve clinical use.
The research pipeline is rich. According to the company's 2023 semi-annual report, the company has a total of 10 projects under development, 8 of which are Class 1.1 innovative traditional Chinese medicine drugs.
Profit forecasts and investment ratings. Considering that the company's brand power has greatly improved, we expect the company's channel expenses to be reduced and that profitability is expected to increase, so we will adjust the profit forecast accordingly. The company's revenue for 2023-2025 is estimated to be 11.998 billion yuan, 13.603 billion yuan, and 15.274 billion yuan, respectively, with year-on-year changes of -4%, 13%, and 12%; net profit to return is 2,050 yuan, 2,457 billion yuan, and 2,851 billion yuan respectively, with year-on-year changes of -13%, 20%, and 16%. The company has strong performance and is a leading enterprise in innovative traditional Chinese medicine. Maintain a “buy” rating.
Risk warning: Business strategy risks such as performance growth falling short of expectations, increased competition in the industry, risk of price reduction in procurement, pharmaceutical policy risks, etc.