Key varieties achieved double-digit growth. In the first three quarters of 2023, the company achieved operating income of 5.793 billion yuan, + 4.13% compared with the same period last year, and net profit of 858 million yuan, + 17.73% compared with the same period last year. Of this total, industrial income increased by 12.9% compared with the same period last year, while business income fell by 4%. The company's key varieties of Suxiao Jiuxin pills, Qingyan dripping pills, Angong Niuhuang pills, Jingwanhong ointment and so on have achieved double-digit growth in sales revenue and sales volume compared with the same period last year. In terms of Q3 alone, the company achieved revenue of 1.705 billion yuan,-4.67% year-on-year, and net profit of 136 million yuan,-47.84% year-on-year. The decrease in the quarter was mainly due to a decrease in investment income during the reporting period.
The company has rich products and many brands. The company has formed a group of traditional Chinese medicine production enterprises, such as proprietary Chinese medicine manufacturers, Chinese medicine companies and traditional Chinese medicine preparation factories, and well-known products include Suxiaojiuxin pills, Jingwanhong ointment, Qingyan dropping pills, Biqi capsule, Zilongjin tablets, Weichangan pills and so on. The company also has chemical API and preparation production enterprises and biopharmaceutical enterprises. In addition, the company is committed to stabilizing the supply of medicinal materials and strengthening origin traceability, completing more than 400 standard Chinese herbal medicines and Chinese herbal slices in the first half of the year.
Profitability has improved significantly. In the first three quarters of 2023, the company had a gross sales margin of 44.86% and a net sales margin of 14.54%, which was + 3.86pct and + 1.12pct respectively compared with the same period last year. In terms of expenses, the rates of sales, management, finance and R & D expenses are 25.11%, 5.88%,-0.28% and 1.49%, respectively, compared with the same period last year, + 2.73pct,-0.63pct, + 0.31pct,-0.17pct respectively. The company gradually combs the full variety value chain, strengthens the group's work direction of "price is the leader, cost is the foundation, and profit is the goal", and implants the working concept of production lean management to various industrial enterprises.
[investment advice]
The growth of the company's performance is basically in line with expectations. We maintain the company's operating income of 92.52, 103.83, 11.678 billion yuan, 11.64, 12.94, 1.443 billion, 1.51, 1.68 and 1.87 respectively in 2025, respectively, and the corresponding PE is respectively as much as 21-19-17. Maintain the "overweight" rating.
[risk Tip]
Risk of industry policy change
High risk of cost fluctuation
Problems of drug quality and safety
Industry competition aggravates risks