This report is read as follows:
The performance contribution of the subsidiary Lizhu Group has grown steadily, the health meta-chemical products have declined under the influence of collection, the respiratory sector has maintained high growth, and new products have been listed one after another, which is expected to bring steady revenue growth and maintain overweight rating.
Main points of investment:
Maintain the "overweight" rating. The total income of 2023H1 is 8.72 billion yuan (+ 1.8%), the net profit is 815 million yuan (+ 1.8%), and the net profit is 781 million yuan (- 2.8%). Among them, Health Yuan (excluding Lizhu Group and Lizhu Monoclonal) achieved a total revenue of 2.194 billion yuan (- 7.5%), a net profit of 445 million yuan (+ 5.7%), and a non-net profit of 435 million yuan (+ 5.01%). Taking into account the impact of the company's product collection, the profit forecast for 2023-2025 is revised downwards, corresponding to the update of EPS to 0.890.00 shock 1.15 yuan (originally 0.90 plus 1.04 pound 1.20 yuan). Considering that the short-term performance of the company is affected by collection, with reference to the comparable company valuation, the 2023 target PE 16X is given, and the target price is lowered to 14.68 yuan to maintain the overweight rating.
Subsidiary Lizhu's performance contribution is robust, health yuan's own respiratory pipeline and health products OTC rapid growth. Core subsidiary Lizhu (excluding Lizhu Monoclonal Antibody) 2023H1 achieved income of 6.678 billion yuan (+ 6.1%), contributing 6.07 billion yuan (+ 18.3%) to the company's net profit. Several sectors of Health Yuan (excluding Lizhu Group and Lizumab) also showed high growth: 1) the prescription drug sector achieved an income of 923 million (- 12.9%), mainly affected by the collection of anti-infective product meropenem injection. Among them, the income in the anti-infection field is 102 million yuan (- 79.2%), and the income in the respiratory field is high, reaching 809 million (+ 44.1%,). 2) the income of API and intermediates reached 1.06 billion (- 7.8%), which was affected by the decline and pressure of 7-ACA and meropenem mixed powder prices. 3) the income of health products and OTC is 202 million (+ 33.2%), thanks to the completion of the digital marketing system and the rapid growth of revenue.
New products are coming on the market one after another, which is expected to make up for the decline in revenue brought about by collective mining. Formoterol fumarate inhalation solution was approved to be put on the market in July 23; Indaterol maleate inhalation powder and fluticasone propionate atomization inhalation suspension are in the market license review stage; salmeterol fluticasone inhalation powder is declared for production. The company actively carried out the research on high barrier complex preparations, and meloxicam nanocrystals injection completed the equivalence evaluation. To expand the respiratory indications, the introduction of TG-1000 by Becton Dickinson & Co is in the clinical stage of III, and XYP-001 is in the clinical stage of phase I.
Catalyst: drug sales exceeded expectations; inhaled preparations made milestone progress.
Risk tips: collection risk; API price fluctuation risk; R & D uncertainty risk.