Event: the company released the 2023 interim report, achieving operating income of 83.751 million yuan, down 37.92% from the same period last year, realizing net profit of-44.7979 million yuan, down 323.70% from the same period last year, and deducting non-return net profit of-49.473 million yuan, down 385.98% from the same period last year.
The performance of 23Q2 has declined, and the production capacity of GMP base has yet to be released: due to the slower-than-expected recovery of the external economic market, the company's operating income of H1 in 23 years is 83.751 million yuan (year-on-year-37.92%), return-44.7979 million yuan (year-on-year-323.70%), and deduct non-return net profit-49.473 million yuan (year-on-year-385.98%). In a single quarter, the company Q2 achieved operating income of 52.9596 million yuan (year-on-year-14.28%), net profit of-1305.46 yuan (year-on-year-264.08%), and non-return net profit of-16.4986 million yuan (year-on-year-357.01%). In order to meet the needs of medium-and long-term market development of CGT, the company's port-adjacent industrial base has been put into operation on schedule, resulting in an increase in operating costs, with a cumulative investment of more than 800 million yuan. At present, the construction and equipment commissioning of the GMP production base in the new area of Hong Kong are progressing in an orderly manner, and the company expects the first phase of the project to be officially put into production in the second half of 2023. With the advantages of this base, Heyuan will greatly increase its own production capacity.
The development of the main business is stable, and the one-stop service accelerates the development process: the development of the main business of Heyuan Biology is stable, and the CRO business continues to grow steadily. In the first half of the year, the sales revenue reached 33.0872 million yuan, an increase of 35.69% over the same period last year, further increasing the market share. CDMO business achieved revenue of 44.3073 million yuan in the first half of the year, supporting CDMO customers to obtain seven new IND approvals and new orders of more than 130 million yuan. In addition, the company provides one-stop CRO/CDMO services for a number of oncolytic viruses, adeno-associated virus vector drugs and CAR-T drugs to speed up the new drug development process with expertise and rich experience, reduce the risk of failure in new drug development, and help customers speed up the drug development process to the maximum extent.
Continue to increase investment, the underlying R & D capacity continues to improve: during the reporting period, the company's R & D expenditure was 24.3388 million yuan, an increase of 71.71% over the same period last year. The rate of R & D expenditure reached 29.06%, an increase of 18.55ppt over the same period last year.
Twelve new patents and trademarks have been declared, one patent for invention and one patent for utility model have been authorized. In the aspects of virus vector sequence modification, promoter development, virus vector component modification, etc., the company released the pcSLenti lentivirus packaging system which has been authorized by the national invention patent at the ASGCT annual meeting in the United States.
Profit forecast and investment advice: as a biotechnology company focusing on the field of gene therapy, the company has rich technology, process and production experience, solid technical barriers and a large number of high-quality customers, and its performance is in line with expectations. It is estimated that the revenue of the company from 2023 to 2025 will be RMB 521,700 million and the net profit of return to the mother will be RMB 0.57 billion respectively. Maintain a "buy" rating.
Risk tips: product and technological innovation R & D risk; core technology and business personnel loss risk; market demand change risk; product quality risk; gross profit margin fluctuation risk.