The company's overall business has maintained steady growth. In 2023, Q1-Q3 achieved operating income of 30.395 billion yuan (+ 9.10%) and non-return net profit of 2.16 billion yuan (+ 13.62%). The company's medical and beauty business maintained strong growth, and 2023Q1-Q3 achieved an operating income of 1.874 billion yuan (+ 36.99%). Maintain the buy rating.
Support the main points of rating
The company's overall business has maintained steady growth. In 2023, Q1-Q3 of East China Pharmaceutical realized operating income of 30.395 billion yuan, an increase of 9.10% over the same period last year, and realized net profit of 2.16 billion yuan, an increase of 13.62% over the same period last year. In addition to the profit and loss effects such as equity incentive fees and participation in holding R & D institutions, the company's non-parent net profit deducted from Q1-Q3 in 2023 was 2.462 billion yuan, an increase of 19.36% over the same period last year. In 2023, the company's Q3 single-quarter operating income reached 10.009 billion yuan, an increase of 3.61% over the same period last year, and the non-return net profit was 733 million yuan, an increase of 16.43% over the same period last year.
The growth of pharmaceutical industry and pharmaceutical commercial business is steady, and the growth rate of profit end of industrial sector is higher than that of income side. The quality and efficiency of operation has improved steadily. In the first three quarters of 2023, the company achieved an operating income of 8.994 billion yuan (including CSO business), an increase of 9.48% over the same period last year, and a non-return net profit of 1.835 billion yuan, an increase of 13.41% over the same period last year. The cost control fee reduction in the pharmaceutical industry sector of the company continues to be implemented, and the growth rate at the profit end is higher than that at the income end. The company's pharmaceutical business maintained steady growth, with an operating income of 20.291 billion yuan in the first three quarters of 2023, an increase of 6.99% over the same period last year, and a net profit of 316 million yuan, an increase of 6.03% over the same period last year.
The medical and beauty business maintained rapid growth, and both overseas and domestic businesses showed excellent growth. In 2023, the operating income of the medical and beauty sector of Q1-Q3 Company reached 1.874 billion yuan (excluding internal offset factors), an increase of 36.99% over the same period last year.
Sinclair, a wholly owned subsidiary of the company, achieved sales revenue of £110 million for Q1-Q3 in 2023, an increase of 23.27% over the same period last year, and £17 million for EBITDA. In terms of domestic medical and beauty business, Xinkoli Aesthetics Q1-Q3 achieved an operating income of 824 million yuan in 2023, an increase of 88.79% over the same period last year. Xinkoli Aesthetics continues to strengthen and optimize the core star product Eyanshi, combined with optoelectronic radio frequency products Reaction and functional skin color management products Glacial Spa to create a "one-stop" facial rejuvenation and beauty program.
Valuation
Adjust the company's profit forecast according to the company's performance. The expected net profit of the company in 2023,2024 and 2025 is 2.993 billion yuan, 3.559 billion yuan and 4.176 billion yuan respectively, corresponding to EPS 1.71,2.03,2.38 yuan respectively. (on October 27, 2022, the expected net profit of 2023 and 2024 is 3.249 billion yuan and 4.025 billion yuan, corresponding to EPS 1.85 yuan and 2.29 yuan. ) main risks faced by ratings
Product research and development is not up to expectations; exchange rate fluctuations; sales are lower than expected risk; health insurance price reduction risk and so on.