What happened: the company recently released its third quarterly report for 2023.
In the first three quarters of 2023, raw materials were under pressure, and nuclear drugs business grew steadily. 2023Q1-3's revenue was 2.59 billion, down 5.7% from the same period last year, and its net profit was 290 million, down 13.5% from the same period last year. Sub-business point of view: 1) API: revenue in the first three quarters was 1.35 billion, down 17.4% from the same period last year, mainly due to the decrease in sales of heparin sodium; 2) preparation business:
Nadu heparin calcium income 153 million, down 48.1% from the same period last year, mainly due to winning the bid collection, sales decreased; 3) Nuclear drugs business: FDG revenue 320 million, up 7.9% year-on-year, standard drug revenue 78 million yuan, year-on-year increase of 21.7%, Yunke injection revenue 190 million, year-on-year increase of 14.3%.
2023Q3 performance is under pressure, it is recommended to pay attention to the value of nuclear drug innovative drug pipeline. 2023Q3's revenue was 800 million yuan, down 18% from the same period last year, and its net profit was 100 million yuan, down 37.2% from the same period last year. From the perspective of business: 1) the revenue of raw materials was 390 million, down 28.2% from the same period last year; the revenue of FDG was 100 million yuan, down 9.5% from the same period last year; and the income of Yunke injection was 68 million, an increase of 2.1% over the same period last year. At the same time, the company disclosed that the R & D cost of Q1-3 increased by 25.69% compared with the same period last year. Thanks to the increase in R & D investment, the company is speeding up the progress of the product research project. Fluorine [18F] Siritide injection (LNC1001) has now entered the clinical phase of Ⅲ; fluorine [18F] fibrinostatin injection (LNC1005) has now completed the clinical summary report of phase Ⅰ.
Nuclear drugs are rich in research pipelines and advanced layout to innovate the frontier field of nuclear drugs. According to the company's 2022 annual report, major pipelines and progress are as follows: rhenium [188Re] Etidronate injection (clinical summary report is being issued); Tau protein positron imaging tracer (phase Ⅲ clinical trial); 99mTc labeled titriphosphine product (completion of on-site inspection by the Central people's Procuratorate) 177Lu-LNC1003 injection (clinically approved in the United States), etc., and the company to Lana to become a completely innovative nuclear drug research and development platform, layout of multi-cancer innovative series of nuclear drugs, advance layout of nuclear drug frontier areas, locking diagnosis and treatment nuclear drugs huge growth space.
Investment suggestion: the company is in the high barrier duopoly nuclear drug scarce race track, the layout of nuclear pharmacy is leading in China, and the diagnosis and treatment nuclear drug rich pipeline is built under the combination of self-research and mergers and acquisitions, and the logic of epidemic recovery is significant. with the penetration of domestic nuclear medicine applications, accelerated equipment expansion, the company's multi-pipelines are expected to gradually enter the harvest period, driving a new round of growth. According to the company's first three quarters, the results are under pressure, we forecast 2023-2024 home net profit of 3.5 million yuan 44 million, maintaining the "buy" rating.
Risk tips: raw material procurement and price fluctuation risk; epidemic recovery diagnosis and treatment demand is not as expected; nuclear pharmacy operation is not as expected; PET/CT installed capacity is not as expected; new nuclear drug research and development is not as expected.