Core viewpoints

In the first three quarters of 2023, the company realized operating income of 1.57 billion yuan, down 3.86% from the same period last year, and its net profit was 103 million yuan, an increase of 0.59% over the same period last year. 2023Q3 realized revenue of 537 million yuan, an increase of 5.90% over the same period last year, an increase of 6.37% over the previous year, and a net profit of 14 million yuan, down 13.07% from the same period last year and 73.86% from the previous year. From a sub-sector point of view, in the first three quarters of 2023, the company's chemical medicine sector achieved revenue of 727 million yuan, an increase of 0.47% over the same period last year, the vaccine sector achieved revenue of about 242 million yuan, an increase of 5.16% over the same period last year, and the agricultural products processing sector achieved revenue of about 448 million yuan, down 9.83% from the same period last year. The revenue of the environmental protection sector was about 92 million yuan, an increase of 13% over the same period last year. As a leading enterprise of veterinary chlortetracycline, the company has a stable market position. at the same time, it continues to develop veterinary vaccines, continuously increase its R & D and innovation, deeply distribute pig vaccines, cattle and sheep vaccines and pet vaccines, and actively promote the research and development process of large vaccine items. the company's performance is expected to continue to improve.

Event

The company disclosed that its operating income in the first three quarters of 2023 was 1.57 billion yuan, down 3.86% from the same period last year, and its net profit was 103 million yuan, an increase of 0.59% over the same period last year. 2023Q3 realized revenue of 537 million yuan, an increase of 5.90% over the same period last year, an increase of 6.37% over the same period last year, and a net profit of 14 million yuan, down 13.07% from the same period last year and 73.86% from the previous year.

Brief comment

1. The chemical medicine plate has risen steadily, and the large single product promotes the growth of the vaccine plate. In the first three quarters of 2023, the revenue of the company's chemical medicine sector reached 727 million yuan, an increase of 0.47% over the same period last year. The revenue of the vaccine plate was about 242 million yuan, an increase of 5.16% over the same period last year. Among them, the revenue of porcine blue ear vaccine in the first three quarters was basically the same as that of the same period last year, and the revenue of porcine mycoplasma vaccine (single injection) was about 14.1 million yuan, an increase of 21.43% over the same period last year. The income of porcine mycoplasma vaccine (double injection) was about 39.57 million yuan, an increase of 27.28% over the same period last year. The revenue of round branch combined vaccine was about 33.91 million yuan, an increase of 23.89% over the same period last year. The revenue of the agricultural products processing sector was about 448 million yuan, down 9.83% from the same period last year, while that of the environmental protection sector was about 92 million yuan, an increase of 13% over the same period last year.

In terms of profit margin, the company's gross sales margin was 31.10% (year-on-year + 2.49pcts) and net sales margin was 7.25% (year-1.20pcts) in the first three quarters of 2023. 2023Q3's gross sales margin is 33.42% (year-on-year + 4.85pcts, month-on-month + 3.04pcts) and net sales margin is 3.38% (year-on-year-1.77pcts, month-on-7.55pcts).

In terms of expenses, 2023Q3's sales expenses are 41.6229 million yuan (year-on-year + 4.80%), and administrative expenses are 79.3704 million yuan (year-on-year + 21.02%). The financial cost is 18.9938 million yuan (year-on-year + 287.92%), which is mainly due to the increase in the amount of borrowing from the bank and the corresponding increase in interest expenses in order to meet the funds needed for production and operation. and the exchange income generated by the stock of claims and debts between the company and foreign subsidiaries due to the narrowing range of exchange rate fluctuations decreased compared with the same period last year; R & D expenses were 15.1339 million yuan (year-on-year-15.02%).

2. Consolidate the leading position of chlortetracycline and continue to increase the research and development of chlortetracycline. In September 2023, the company released a single product of brucellosis vaccine, "you Butai". Compared with the existing brucellosis vaccine in the market, "Youbutai" is the first to achieve a comprehensive breakthrough of "human safety, whole-group immunity, detection and purification, and universal use of cattle and sheep". It is planned to start sales next year, with an expected income of more than 50 million yuan, with great potential for future growth. On October 24, the inactivated bovine nodular dermatosis vaccine (NMG strain, suspension culture) jointly developed by Jinhe Youben and Inner Mongolia Autonomous region Animal Disease Prevention and Control Center passed the emergency evaluation organized by the Ministry of Agriculture and villages, and the product is expected to be on the market in the second half of next year. In addition, the company considers the proposal to acquire 60% of Jilin Best Wanke Biotechnology Co., Ltd. by means of equity transfer and capital increase through its holding subsidiary. Jilin Best Wanke can cooperate with domestic well-known enterprises to develop and jointly declare the African classical swine fever inactivated vaccine, which is currently under the emergency evaluation and evaluation of the Ministry of Agriculture and Village, and is expected to enhance the company's competitiveness in non-plague vaccines. In terms of new production capacity, the 1000-ton doxycycline project has already begun trial production and is expected to be formally produced in the first half of next year; the new 52000 tons of veterinary grade high-efficiency chlortetracycline 1000 tons of chlortetracycline hydrochloride raw material drug project (phase 6) is expected to be trial-produced next year and will be formally put into production in the second half of the year, which is expected to promote the company's chlortetracycline production gradually.

3, profit forecast and rating: as the leader of the veterinary chlortetracycline industry, the company continues to lay out new production capacity to consolidate its leading position. at the same time, the vaccine plate continues to increase the research and development of new products, which is expected to promote the company's performance. Taking into account the overall poor market for raw materials and the impact of the downturn in the downstream breeding market on the company's performance, we downgrade the company's revenue and performance forecasts. We expect the company to achieve revenue of 2.233,2869pm in 2023-2025. 3.524 billion yuan (the previous value is 2622,322.92pm), and the net profit of the parent is 149,253,358 million yuan (the previous value is 173pm 2353010 million). The EPS is 0.19, 0.32 and 0.46 yuan, respectively, and the corresponding PE is 25.54x/15.04x/10.60x, respectively. Based on the significant competitive advantage of the company's chlortetracycline products, and the vaccine sector, the large single product keeps growing and maintains the "overweight" rating.