Events:
On October 19, 2023, the company released the third quarterly report of 2023: operating income of 1.46 billion yuan (+ 27.69%), net profit of 369 million yuan (+ 84.08%) and non-return net profit of 411 million yuan (+ 68.69%) in the first three quarters of 2023.
Main points of investment:
Quarterly profit growth is high. In the first three quarters of 2023, the company's operating income was 1.46 billion yuan (+ 27.69%), the net profit was 369 million yuan (+ 84.08%), and the non-return net profit was 411 million yuan (+ 68.69%). In the third quarter of 2023, the company's operating income was 556 million yuan (+ 29.86%), the net profit was 167 million yuan (+ 149.78%), and the non-return net profit was 178 million yuan (+ 92.06%).
The net profit margin increased and the operating cash flow improved. Benefiting from the fact that the royalty fee for the PEG patent is no longer paid after the expiration of the patent, the company's gross profit margin increased to 94.64% in the third quarter of 2023, an increase in 5.63pct compared with the same period last year. The company's sales expense rate was 34.05% in the third quarter of 2023, a year-on-year reduction in 10.30pct. Together, they pushed the company's net profit margin to 29.98% in the third quarter of 2023, the highest since the company went public. The company's net operating cash flow was 332 million yuan in the third quarter of 2023 and 383 million yuan in the first three quarters, exceeding the 363 million yuan in 2022.
The rapid development of innovative products is expected to contribute to new increments. The long-acting human granulocyte stimulating factor developed by the company on June 30, 2023 was approved to be listed on the market. The company has granted Shanghai Fosun Pharmaceutical the exclusive right to promote and sell the product in Chinese mainland. The sale of products on the market in the future is expected to contribute new performance increments. According to the drug clinical trial registration and information disclosure platform, the company is studying Y-type PEG recombinant human growth hormone injection (Yi Peisheng), and completed the Ⅱ / Ⅲ phase clinical trial on July 10, 2023 for the treatment of growth hormone deficiency in children.
According to the profit forecast and investment rating, the company's income in 2025 will be 2.061 billion yuan / 2.817 billion yuan / 3.721 billion yuan, and the net profit will be 500 million yuan / 666 million yuan / 914 million yuan, corresponding to PE 31.36X/23.56X/17.16X. We believe that the company's protein long-acting modification technology platform is deeply accumulated, the product pipeline is rich, long-acting interferon rapid release, long-acting human granulocyte stimulating factor is about to be put on the market. Due to the impact of the medical environment, revenue growth decreased slightly; due to the expiration of patents no longer pay sales commission and sales expenses control, raised the company's profit forecast. Maintain a "buy" rating.
The risk indicates that the speed of new hepatitis B patients is not as fast as expected, the results and progress of clinical trials are not as expected, the risk of policy changes leading to product price changes exceeding expectations, the risk of new product promotion and sales falling short of expectations, the risk of market competition aggravating the risk of exceeding expectations, the risk of changes in cooperation between intellectual property rights and raw material suppliers.