2023Q3 achieved a net profit of 63.06 million yuan, an increase of 22.82% over the same period last year. The company announced that in the first three quarters of 2023, operating income was 930 million yuan, up 12.25% over the same period last year, and net profit was 180 million yuan, an increase of 39.78% over the same period last year. Of this total, 2023Q3 realized 310 million yuan in operating income, down 0.92% from the same period last year, and 63.06 million yuan in net profit, an increase of 22.82% over the same period last year.
In terms of products, the income of biological products in the first three quarters was 630 million yuan, including 330 million yuan for pig vaccines (+ 8.9%), 300 million yuan for poultry vaccines and antibodies (+ 10.0%), 900000 for ruminant vaccines, 270 million yuan for chemicals (+ 19.7%) and 6.4 million yuan (+ 322%) for functional health products (pets) in the first three quarters. 2023Q3, revenue from pig vaccines decreased by 3% compared with the same period last year, revenue from pig chemicals decreased by 25%, revenue from poultry vaccines increased by 9.92%, and revenue from poultry medicines decreased by 1.02% year-on-year.
Focus on "big customer + large product" strategy, cost control effect is remarkable. The marketing strategy of "big customer" and "large single product" continuously implemented by the company has achieved remarkable results. The growth rate of round branch duality has been more than 20%, which is higher than the overall income level of pig vaccine (about 10%). The revenue of Top30 pig farming group increased by 21% compared with the same period last year, which was higher than that of the company's overall pig products (17%). The income of Top30 farming group accounted for 42%. The proportion of Top30 pig group income continues to increase, and 2023Q3 accounts for 64.67% of the company's total pig product income.
In terms of cost control, in the first three quarters of 2023, the sales expense rate was 27.23% (year-on-1.87pcts), the management expense rate was 6.59% (year-on-1.69pcts), and the net interest rate was 19.29% (year-on-year + 3.2pcts). In the environment of the continuing downturn in the downstream aquaculture industry, the improvement of the company's profitability benefited from a good level of cost control.
The product matrix continues to be rich, and the non-plague vaccine is progressing smoothly.
In the first three quarters of 2023, the company's R & D expenditure was 61.15 million yuan, an increase of 24.1% over the same period last year. The live pseudorabies vaccine (HN1201-R1 strain) independently developed by the company is about to enter the new veterinary drug registration review phase and is expected to become the first approved swine pseudorabies epidemic plant live vaccine; the African classical swine fever subunit vaccine project developed by the company in cooperation with Lanzhou Veterinary Research Institute has improved the relevant application materials according to the first expert review opinion of emergency evaluation and has been submitted for review again. The trivalent subunit vaccine of highly pathogenic avian influenza (H5 + H7) developed in cooperation with Harbin Veterinary Research Institute has submitted an application for new veterinary drug registration; in August 2023, the company obtained the new veterinary drug registration certificate of trivalent inactivated vaccine (type A HN3 strain + type B HN5 strain + type C SD3 strain) against avian infectious rhinitis. In addition, the company actively promotes the construction of biosafety level III laboratory (BSL-3/ABSL-3) and is expected to apply for CNAS acceptance by the end of the year. In the pet sector, 2023Q3 has completed the acquisition of Le Pong Health and hip-hop network, and the pet business has been further integrated; Cat Sanlian is about to pass the emergency evaluation, which is expected to become a new performance growth point of the company in the future.
Investment suggestion
We expect the company to achieve operating income of 1.31 billion yuan, 1.62 billion yuan and 1.97 billion yuan from 2023 to 2025, an increase of 6.5%, 24.0% and 21.4% over the same period last year, and the corresponding net profit of 217 million yuan, 337 million yuan and 499 million yuan, with year-on-year growth rates of 24.6%, 55.3% and 48.1%, respectively, and the corresponding EPS is 0.61,0.95,1.41 yuan respectively.
Risk hint
Vaccine policy change; animal disease; product research and development risk.