The company released the third quarterly report of 2023: the revenue in the first three quarters was 1.631 billion yuan, with a year-on-year increase of 18.43%; the net profit attributable to the parent company was 39.32 million yuan, with a year-on-year increase of 101.17%; the net profit deducted from non-profit was 27.22 million yuan, with a year-on-year increase of 520.59%. In the third quarter, revenue was 547 million yuan, up 25.87% year-on-year; net profit attributable to parent was 4.04 million yuan; net profit deducted from non-parent was 730,000 yuan, turning losses into profits compared with the same period last year.
Year-on-year turnaround into profit, month-on-month profit margin has declined. In the third quarter, the company realized a turnaround from losses to profits, with 3Q23 gross profit margin of 25.81%, an increase of 7.19pct year-on-year, a month-on-month decrease of 1.08pct, a net profit margin of 0.77%, and a month-on-month decrease of 4.24pct. Expense ratio: sales expense ratio 4.07%, month-on-month decrease 0.38pct; management expense ratio 5.63%, month-on-month decrease 1.08pct; research and development expense ratio 7.02%, month-on-month increase 1.17pct; financial expense ratio 6.87%, month-on-month increase 1.62pct.
Small drop in iodine price: According to the data of the General Administration of Customs, the import price of iodine in September 2023 was USD 67,000/ton, which was slightly lower than the highest price of USD 71,500/ton in February 2023, showing a slight downward trend month by month. If iodine prices fall further in the future, it is expected to bring profit elasticity.
Fixed increase approved, the future is expected to further expand production capacity: October, the company raised 1.48 billion yuan fixed increase has been approved by the Shanghai Stock Exchange, if subsequently approved for registration, will be used for "annual output of 1,550 tons of nonionic CT contrast agent series API project","annual output of 7,710 tons of iodine compounds and CMO/CDMO products project" and supplement working capital. This fixed-increase project will help to improve the company's production scale advantage and market position, supplement the production capacity of ioversol, iomeprol, iopromide and other raw materials, and lay a foundation for the long-term development of the company.
Formulation: With the help of centralized collection and volume, ioversol injection has been approved to further improve the layout of contrast media. At present, iohexol, iodixanol and iopamidol have been purchased in selected quantities, and 1H23 preparation business has basically achieved break-even. In October, ioversol injection obtained the drug registration certificate, and the company further improved the layout of iodine contrast media.
Maintain a "strongly recommended" investment rating. From the perspective of the global market, the competition pattern of contrast agent preparations is still dominated by the original research manufacturers, and the market share and sales channel breadth of each original research manufacturer in the world are relatively large, and the export substitution market of API is broad. The company is a leading enterprise in the domestic contrast agent industry, with comprehensive variety coverage, integrated development of API preparations and large development space. It is estimated that the company's net profit attributable to the parent company in 23-25 years is 0.5/2.3/4.0 billion yuan, corresponding to PE105/24/14 X, maintaining the "strongly recommended" rating.
Risk warning: raw material price fluctuation, safety and environmental protection, investment project income less than expected, exchange rate fluctuation and other risks.