Event

On August 30, 2023, the company disclosed its semi-annual report 2023. In the first half of 2023, the company achieved an operating income of 523 million yuan, an increase of 41.76% over the same period last year, and a net profit of 84 million yuan, an increase of 41.63% over the same period last year. Among them, in the second quarter alone, the company realized operating income of 270 million yuan, an increase of 41.00% over the same period last year, and a net profit of 47 million yuan, an increase of 38.92% over the same period last year.

Event comment

The scale of boron-containing fluorine-containing product line continues to improve, giving further play to technical advantages.

The company focuses on the continuous improvement of the product line of boric acid and boric acid esters and fluorine-containing blocks, continuously helping customers to be in the leading position in the domestic industry in the process of new drug research and development. As of June 2023, the company has established a cooperative relationship with 90% of the global TOP 20 pharmaceutical companies, demonstrating the company's technical advantages and R & D strength in this product field.

Have a complete product library to build high barriers, constantly reduce cost and increase efficiency to improve product performance-to-price ratio.

The company has a complete domestic molecular block product library, the number of spot products has reached 103000, and continues to grow. At the same time, the company has a large, loyal and expanding customer base around the world.

The company has supplied more than 10,000 customers in the past 12 months, an increase of about 18% compared with 2022.

The company can reduce cost and increase efficiency through research and development and supplier management, and continue to reduce procurement prices through strong management ability of upstream suppliers. The overall price reduction rate of repeated procurement of raw materials in the first half of 2023 is more than 40%. The efficient management efficiency and the technical advantage of molecular synthesis reaction make the company have strong bargaining power to suppliers and enable the company to reduce cost and increase efficiency.

Actively expand overseas markets and continuously improve brand recognition

At present, the company has set up three overseas regional centers in the United States, Germany and India, and has set up warehouses in Shanghai, Shenzhen, Tianjin, Chengdu and Wuhan. Rely on the efficient linkage between the Shanghai headquarters and the global regional centers to greatly shorten the radius of customer service at home and abroad. At the same time, through upgrading the ERP system, WMS system, improve the supply chain and business management network, improve the efficiency of global layout.

Investment suggestion

We estimate that the company's revenue in 2023 to 2025 will be 1.983 billion yuan respectively; the year-on-year growth rate will be 36.4%; 32.9%, 31.2%; the net profit will be 2.03 million, and the net profit will be 265,345 million yuan; the year-on-year growth rate of net profit will be 39.2%, 30.6% and 30.1%, respectively; and the corresponding EPS for 2023 to 2025 will be 2.24 percent, 2.92 percent, 3.80 yuan per share, and the corresponding valuation is 33-25-19. Considering that the company, as the leader of domestic molecular building blocks, has a wide range of products and gradually accumulates brand advantages, we are optimistic about the company's development layout in overseas markets and the growth potential of new products and new areas, and maintain the "buy" rating.

Risk hint

The risk of technical brain drain; the risk of drug molecular block design; the management risk brought by the expansion of business scale.