Event: the company released its 2023 semi-annual report, with revenue of 10.734 billion yuan (yoy+17.64%), net profit of 1.402 billion yuan (yoy+61.53%) and non-return net profit of 1.349 billion yuan (yoy+66.53%) in the first half of 2023. Q2 realized revenue of 5.132 billion yuan (yoy+10.54%), net profit of 592 million yuan (yoy+2.63%) and non-return net profit of 560 million yuan (yoy+2.43%) in a single quarter.
Comments:
Colombo successfully landed in Hong Kong stock market, and SKB264 was used to reach the main end point in III phase of TNBC patients.
The holding subsidiary 6990.HK was successfully listed on the main board of the Hong Kong Stock Exchange in July 2023. 2023H1 achieved revenue of 1.046 billion yuan, mainly due to an advance payment of US $175 million (seven ADC asset licenses) paid by Merck & Co Inc in March. The R & D expenditure was 490 million yuan, with a loss of 31 million yuan.
Three indications of SKB264 (TROP2 ADC) for triple negative breast cancer (TNBC), EGFR-NSCLC patients with failed EGFR-TKI treatment and HR+/HER2 breast cancer patients with 2L or above were confirmed as breakthrough therapy. In August 2023, the phase III clinic for patients with second-line and above TNBC has reached the main end point.
High growth of parenteral nutrition products in the infusion field, revenue of non-infusion drugs affected by collection and collection pressure 2023H1 infusion products achieved 5.027 billion yuan (yoy+14.27%), the sales structure of infusion products was further optimized, and the proportion of closed infusion volume increased 3.70pp. The company has more than 10 varieties of parenteral nutrition products on sale, and the sales of fat milk amino acid (17) glucose (11%) injection (Dorte, the fifth batch of collection) increased by 33.08% compared with the same period last year. Alanyl glutamine amino acid (18) injection (Domengjie, non-medical insurance varieties) sales increased by 33.56%. Levofloxacin (the fifth batch of collection won the bid) achieved an income of 234 million yuan (yoy+2.83%).
2023H1 non-infusion drugs are affected by collection and other factors to achieve revenue of 1.834 billion yuan (yoy-8.02%). The sales of the three products in the male department increased by 28.80% over the same period last year, and the income side reached 14.55 million yuan (yoy-89.98%). Affected by collection, the revenue of rehabilitation new liquid was 105 million yuan (yoy-39.4%), the sales revenue of esitalopram oxalate decreased by 49.85% compared with the same period last year, and the sales revenue of paclitaxel for injection (albumin-bound) decreased by 34.81%. Engler's net income is 91.12 million yuan (yoy+97.15%).
In 2023, 30-35 generic drugs (including consistency evaluation) are expected to be approved, and 35-40 items are planned to be declared.
With the rapid growth of biological profits in Chuanning, synthetic biology has steadily promoted antibiotic intermediates and APIs: 2023H1 achieved revenue of 2.37 billion yuan (year-on-year + 14.54%) and gross profit of 673 million yuan (year-on-year + 19.46%). Chuanning Biology and its subsidiaries achieved operating income of 2.417 billion yuan (yoy+21.84%) and net profit of 391 million yuan (yoy+64.82%) belonging to Chuanning Biological parent company, thanks to faster-than-expected recovery of penicillin market, significant increase in 7ADCA sales and good cost control. In the aspect of synthetic biology: the first product, red myrrh alcohol, has completed the development of production technology and completed the pilot test successfully, and the fermentation process of pentahydroxytryptophan project has been optimized.
Profit forecast: according to the growth of the company's business operations, we expect the total revenue from 2023 to 2025 to be 21.007 billion, 22.615 billion and 25.162 billion respectively, the return net profit to be 2.148 billion, 2.31 billion and 2.647 billion respectively, and the corresponding PE to be 18 times, 17 times and 15 times respectively.
Risk factors: the risk of intensified product competition; the lower-than-expected progress of research and development; the risk of policies such as collection and acquisition.