Core viewpoints
The revenue end of the company declined slightly in the third quarter, mainly due to fluctuations in the price of caffeine API, but the net interest rate increased with the decrease of cost and sales control fee. In August 2023, the company announced that it planned to introduce a number of innovative assets such as monoclonal antibodies, ADC and mRNA vaccines through cash capital increase of Jushi Biology, a subsidiary of the Holding Group. The company laid out innovative drug fields and opened up future growth space.
Event
1. The company released the third quarter performance announcement, the revenue in the first three quarters was 1.902 billion yuan, with a year-on-year growth of 0.46%; the net profit attributable to the mother was 583 million yuan, with a year-on-year growth of 12.74%.
2. On August 30, the company issued an announcement to increase capital to Jushi Biology in cash, obtain more than 51% equity of Jushi Biology, and realize holding of the target company.
Risk analysis.
Uncertainty risk of new drug research and development: new drug research has the characteristics of long research cycle, high investment, high risk and low success rate, from laboratory research to new drug approval and marketing. it has to go through many complex links, such as preclinical research, clinical trials, new drug registration and marketing, and after-sales supervision.
Industry policy risks: risks such as changes in research design requirements, price changes, changes in purchase policies with quantities, changes in the scope and proportion of medical insurance reimbursement due to industry policy adjustments.
Assuming a 10% fluctuation in the price of caffeine API, the demand for caffeine from downstream customers is relatively stable every year, the order volume will not fluctuate greatly, and the revenue from caffeine API accounts for 70% of the company's overall revenue, so it is expected to have a 7% impact on the company's revenue.
Research and development is less than expected risk: in the process of research and development of new drugs, from drug discovery, preclinical research, clinical trials to commercial marketing, there are not only problems that may be faced due to substandard enterprise technology and processes, but also untimely communication with regulators. Non-compliance and other risks.