Profit-side flexibility is released, and profitability continues to increase
In 2023H1, the company achieved operating income of 238 million yuan, an increase of 15.44% over the previous year; realized net profit of 32.8882 million yuan, an increase of 60.26% over the previous year; achieved net profit of 33,1297 million yuan, an increase of 71.86% over the previous year.
Looking at 2023Q2 alone, the company achieved operating income of 116 million yuan, up 14.49% year on year, down 4.13% month on month; net profit of 176.12,400 yuan, up 73.83% year on year, up 15.30% month on month; net profit after deducting non-return net profit of 19.3897 million yuan, up 104.06% year on year and 41.12% month on month. The company's profit side elasticity was gradually unleashed. In the second quarter, gross margin increased 2.76 pct month-on-month, net interest rate increased 2.57 pct month-on-month, and profitability continued to increase. Limited to pressure on the demand side, we lowered our profit forecast. We expect the company's net profit to be 100/1.29/170 million yuan (originally estimated at 1.14/1.72/244 million yuan) in 2023-2025, and EPS at 1.30/1.68/2.21 yuan, respectively. The corresponding P/E for the current stock price is 46.0/35.7/27.1 times, respectively. It is expected that the company will take the lead in benefiting from the recovery of overseas demand, and maintain its “buy” rating.
R&D investment continues to grow, and the CADD/AIDD platform continues to empower customers and new drug project companies to continue to enhance their R&D capabilities. 2023H1 R&D investment has reached 19.28 million yuan, with a three-year compound growth rate of 86.71%. Currently, the number of R&D personnel has reached 687, an increase of 16.24% over the previous year, accounting for 67.89% of the total number of employees.
The company has built 8 core technology platforms and actively promoted the layout and reserve of cutting-edge technologies; as of the end of June 2023, the company's CADD/AIDD platform has provided technical support for 52 new drug projects, 2 of which have entered clinical phase I and 3 are in the IND stage. Currently, the purchasing company CADD/AIDD has 15 customers.
Marketing and promotion efforts have been further strengthened. New orders have improved markedly, and the company has further increased its marketing and promotion efforts. In total, 2023H1 has participated/hosted 17 exhibitions, forums and marketing activities at home and abroad. The service sector of 2023Q2 Company signed 133 million new orders, an increase of 42.10% over the previous month; the number of new customers was 18, an increase of 80.00% over the previous month. The amount of new orders signed in the commercial production sector was RMB 27.87 million, an increase of 1.65% over the previous month; the number of new customers was 4, an increase of 100.00% over the previous month.
The number of new orders signed by the company and the number of new customers expanded were greatly improved over the previous month, providing a guarantee for future performance growth. 2023H1 has established a new wholly-owned subsidiary, American Hongbo, which is mainly engaged in overseas business expansion and as the main body for future laboratory service business in the US, and is expected to further deepen cooperation with overseas customers.
Risk warning: domestic policy changes, loss of core members, decline in demand for pharmaceutical R&D, etc.