East Fulong issued a semi-annual announcement for 2023: in the first half of 2023, revenue reached 2.951 billion yuan, up 21.58% from the same period last year; net profit from home was 426 million yuan, up 5.82% from the same period last year; and net profit from non-return was 393 million yuan, up 5.72% from the same period last year.
Main points of investment
The preparation sector is growing steadily, and the short-term fluctuation of the life science industry does not change the long-term growth potential.
In the first half of 2023, the company achieved revenue of 2.951 billion yuan, an increase of 21.58% over the same period last year, and a net profit of 426 million yuan, an increase of 5.82% over the same period last year. Sub-business sector: (1) traditional preparation Division: revenue of 1.581 billion yuan, an increase of 26.63% over the same period last year, is the main driving force of performance growth. Among them, injection stand-alone and system, inspection packaging machine and system, oral solid machine and system respectively contributed revenue of 1.309 billion yuan / 183 million yuan / 89 million yuan, up 22.23% and 67.28% respectively over the same period last year. 30.48%; (2) Biotechnology Division: realized revenue of 800 million yuan, up 7.18% over the same period last year. Among them, the revenue changes of bioengineering stand-alone and system / life science products / API stand-alone and system were 2.58% and 97.04% respectively over the same period last year. The global CGT and other high-growth emerging areas remain prosperous for a long time, and are optimistic about the potential for downstream demand growth in the field of life sciences. (3) the performance of the Engineering Division and the Food Division increased steadily, with revenues of 265 million yuan and 149 million yuan respectively, up 11.77% and 59.49% respectively over the same period last year.
The internationalization strategy is advancing steadily, and the layout of high gross margin products shows the growth toughness.
As a pioneer of domestic pharmaceutical equipment, the company is actively expanding overseas markets.
In the first half of 2023, overseas income reached 581 million yuan, with export revenue accounting for 19.7%. At the same time, the company had a large number of overseas systematic orders and outstanding profitability, and the gross profit margin of overseas business reached 50.5%. With the further increase in the complexity of overseas equipment and the acceleration of overseas product delivery, we are optimistic about the simultaneous improvement of profitability in the follow-up. As of the date of release in 2023, the company's business has covered more than 40 countries and regions around the world, serving nearly 3000 well-known pharmaceutical companies, and the internationalization strategy has been very effective.
The business continues to expand in depth, and there is a broad space for domestic substitution.
The company has been deeply engaged in the industry for 30 years, the technical layout has been continuously deepened, and the category has continued to be rich. From the stand-alone equipment to the engineering solution, from the traditional superior preparation plate to the four major plates, the company's manufacturing level and pharmaceutical technology work together, and the growth toughness is constantly enhanced. In the first half of 2023, the company invested 164 million yuan in R & D, an increase of 8.43% over the same period last year. At the same time, the company promoted the construction of production capacity projects in an orderly manner, raising a total of 608 million yuan during the reporting period. 62 million yuan / 12 million yuan / 116 million yuan was invested in the biopharmaceutical equipment industry trial production center project, Jiangsu biomedical equipment industrialization base project and Zhejiang Dongfulong Biotechnology Co., Ltd. Life science industrialization base project.
Profit forecast
It is predicted that the income of the company from 2023 to 2025 is 62.89,74.21 and 8.904 billion yuan respectively, and the EPS is 1.28,1.52,1.91 yuan respectively. The current stock price corresponds to PE of 14.8,12.5,9.9 times respectively. The company is one of the leading domestic pharmaceutical equipment, with strong manufacturing technology advantages accumulated in the industry over the past 30 years, smooth development of international business, layout of life sciences and high growth in emerging fields, and is optimistic about the volume of follow-up products. Coverage for the first time, giving a "buy" investment rating.
Risk hint
Product delivery risk, market competition risk, downstream demand recovery risk, capacity landing risk, lower-than-expected investment project schedule risk, import substitution risk, industry policy and government regulatory risk, geopolitical risk