Event: The company announced the 2023 three-quarter report. 2023Q1-3 achieved operating income of 10.682 billion yuan, an increase of 10.73% over the previous year, and realized net profit of 3.612 billion yuan, an increase of 4.27% over the previous year. Looking at a single quarter, the company achieved operating income of 4.514 billion yuan in Q3 of 2023, an increase of 18.32% over the previous year, and net profit of 1,452 billion yuan, an increase of 7.98% over the previous year.
The overall cost ratio has declined, and gross margin has declined. The company's 2023Q1-3 management expense ratio was 5.3%, down 0.6pct year on year; sales expense ratio was 26.4%, down 2.2 pct year on year; financial expense ratio was -0.8%, down 0.1 pct year on year; R&D expenses rate was 10.9%, up 1.3 pct year on year. The company's 2023Q1-3 gross margin was 84.9%, down 3.9 pct year on year, net profit margin was 35.4%, down 1.6 pct year on year.
The performance was in line with expectations, and the performance of all sectors was steady. Looking at the first three quarters by sector, the subsidiary Jinsai Pharmaceutical achieved revenue of 8.118 billion yuan, an increase of 4% over the previous year, and a net profit of 3,524 billion yuan, an increase of 2% over the previous year. The subsidiary Baike Biotech achieved revenue of 1,243 billion yuan, an increase of 44% over the previous year, and a net profit of 331 million yuan, an increase of 56% over the previous year. Huakang Pharmaceutical achieved revenue of 516 million yuan, an increase of 8% over the previous year, and a net profit of 28 million yuan, an increase of 12% over the previous year. Hi-Tech Real Estate achieved revenue of 775 million yuan, a year-on-year increase of 32%, and net profit of 76 million yuan, a year-on-year decrease of 14%.
The proportion of long-acting growth hormone has increased, and the shingles vaccine has contributed to an increase. According to the company's investor research report, Jinsai Pharmaceutical continued to promote the sales and promotion of long-acting growth hormone products in the first three quarters. The revenue of long-term products increased by 30% in the first three quarters of 2023, and the share of long-term products in overall growth hormone product revenue increased further, currently accounting for about 29%. In the first three quarters of 2023, children's nutritional products achieved revenue of nearly 150 million yuan, an increase of about 300% over the previous year. The subsidiary, Baike Biotech's new product, achieved sales of the herpes zoster vaccine, which led to a rapid increase in Baike Biotech's performance.
Maintain the “Overweight” rating. Based on the uncertain impact of the industry environment and the company's R&D pipeline layout, it is estimated that the EPS for 23-25 will be 11.63/13.78/16.09 yuan, maintaining the “increase in holdings” rating.
Risk warning: risk of policy change, risk of new drug development, risk of talent integration