Event
Changchun Hi-Tech issued a results announcement for the third quarter of 2023: Q3 realized operating income of 10.682 billion yuan in 2023, an increase of 10.73% over the same period last year; net profit of 3.612 billion yuan, up 4.27%; and net profit of 3.616 billion yuan, an increase of 5.42% over the same period last year.
Main points of investment
Still achieve positive growth at a high base
As of 2023Q3, subsidiary Jinsai Pharmaceutical achieved revenue of 8.118 billion yuan, an increase of 3.81% over the same period last year, and net profit of 3.524 billion yuan, an increase of 1.56% over the same period last year. In the third quarter alone, Jinsai Pharmaceutical's revenue was 2.979 billion yuan, an increase of 4.23 percent over the same period last year and 6.93 percent from the previous month. Jinsai Pharmaceutical's net profit was 1.327 billion yuan, up 3.75 percent from the same period last year and 1.92 percent from the previous year. The sales of long-acting dosage forms showed a steady growth trend, with revenue from long-lasting products growing by 30% year-on-year in the first half of 2023 and 70% in the second quarter of 2023. The proportion of income from long-acting forms of growth hormone has increased from 18% in 2022 to about 28% of 2023H1. At the same time, the company has realized self-supply of polyethylene glycol recombinant human growth hormone injection, which can effectively reduce production costs, increase the gross profit margin of long-acting forms of growth hormone, and provide more room for the company's product iteration and future competition.
The progress of blister sales exceeded expectations.
As of 2023Q3, subsidiary Baike Bio realized revenue of 1.243 billion yuan, an increase of 43.60% over the same period last year, and net profit of 331 million yuan, an increase of 56.31% over the same period last year. In the second quarter alone, Baike's biological revenue was 684 million yuan, up 60.91% from the same period last year and 79.78% from the previous year; the net profit from its mother was 220 million yuan, up 58.92% from the same period last year and 136.24% from the previous quarter, mainly due to herpes zoster. As of October 15, 2023, 23 batches of BG biological herpes zoster vaccine have been approved and issued, with an estimated 80-828000 batches. At present, 29 provinces, autonomous regions and municipalities directly under the Central Government have completed access and set up a digital marketing model. It is expected that the market coverage of herpes zoster vaccine will increase steadily.
Profit forecast
It is predicted that the income of the company from 2023 to 2025 is 155.56 yuan, 180.22 yuan and 20.832 billion yuan respectively, the return net profit is 50.84,63.57 yuan and 7.488 billion yuan respectively, and the EPS is 12.56,15.71,18.50 yuan respectively. The current stock price corresponds to PE 11.1,8.9,7.6 times, maintaining the "overweight" investment rating.
Risk hint
Collection of uncertainty risks, growth hormone competition aggravates risks, new patients fall short of expectations, policy risks, and lower-than-expected sales of herpes zoster vaccines.