Event: the company released the three-quarter report of 2023, with an income of 1.72 billion yuan (- 5.5%) in the first three quarters, a net profit of 460 million yuan (- 0.4%), and a net profit of 440 million yuan (- 3.3%). In the third quarter, the income was 570 million yuan (- 4.7%), the net profit was 140 million yuan (- 11.9%), and the non-return net profit was 130 million yuan (- 13.9%).
Affected by non-main business, the growth rate of the company's performance has slowed down. The decline in the company's revenue is mainly due to the fact that Wolong School has stopped cooperating in running schools since this year and no longer generates income; its net profit is basically the same as that of the same period last year, benefiting from the increase in the net profit of Dain Pharmaceutical on the one hand and the loss of non-main business on the other. The company's 2023Q1-Q3 revenue was 5.7 million yuan, compared with-7.3%, 4.5%, 4.7%, 1.6 and 140 million yuan, respectively, compared with + 4.4%, 6.4% and 11.9%, respectively. 2023Q3 has a gross profit margin of 86% and a net profit margin of 51.9%.
Rates fluctuated slightly during 2023Q3, of which the sales rate was 19.8% (+ 3.5pp), the management rate was 7.5% (- 0.7pp), the financial rate was-1.6% (- 1.1pp), and the R & D rate was 3.9% (+ 1.2pp).
Continue to focus on the main pharmaceutical industry, Walter Information filed for bankruptcy liquidation. The company announced on October 20 that the wholly-owned subsidiary Walter Information, which continues to lose money and is insolvent due to mismanagement, intends to apply to the court for bankruptcy liquidation. after the court decides that Walter Information has entered the bankruptcy proceedings, the company will no longer have control over it. Walter Information will no longer be included in the scope of the company's consolidated statements. Walter's information income and profits account for a small proportion of the company, and its bankruptcy liquidation will not have a significant impact on the company's operating performance and continuing operations. At present, the company has gradually implemented the reform of the state-owned assets management system, and the company will continue to focus on the main pharmaceutical industry in the future. From January to September 2023, the core subsidiary Dain Pharmaceutical achieved operating income of 1.69 billion yuan (+ 5%) and net profit of 900 million yuan (+ 8.6%).
Profit forecast and investment advice. It is estimated that the net profit from 2023 to 2025 will be 600 million yuan, 730 million yuan and 840 million yuan respectively, corresponding to a year-on-year growth rate of 14.7%, 21.3% and 15.3%, maintaining the "buy" rating.
Risk tips: sales may fall short of expectations; collection risk; risk that the progress of the product under development is not as expected.