Event: The company released its three-quarter report for 2023, achieving operating income of 2.93 billion yuan (+4.5%), net profit attributable to shareholders of the parent company of 4.7 billion yuan (+0.2%), and net profit attributable to shareholders of the parent company of 440 million yuan (-2.2%) after deduction. Operating income for the third quarter was 990 million yuan (+6.7%), net profit attributable to shareholders of the parent company was 160 million yuan (-10.3%), and net profit attributable to shareholders of the parent company after deductions was 150 million yuan (-14.7%).
Performance gradually recovered after the marketing reform, and the increase in Q3 management expenses affected profits. Q3 The company achieved revenue of 990 million yuan (+6.7%), revenue growth resumed in a single quarter, and performance gradually recovered after marketing reforms. The sales expense ratio for the first three quarters was about 20.7% (-3.6pp), the management expense ratio was about 4.9% (+0.6pp), the R&D expense ratio was about 8.9% (+0.1pp), and the expense ratio was well controlled; gross margin was about 51% (-3.2pp), net profit margin was about 16.3% (-0.7pp), and the profit margin was relatively stable.
The first new class 1 drug for insomnia, Didacinib capsules (EVT201), is about to be marketed. Didacinib capsules are a partial agonist/partial positive allomodulator of GABAA receptors. They are used to treat insomnia disorders. They are an important improvement on traditional insomnia treatment drugs and improve the mental state of users during the day. With traditional benzodiazepines? Compared with complete agonists of GABA receptors, they have obvious advantages in terms of adverse effects such as movement disorders, sequelae effects, tolerance, ethanol interactions, physical dependence, and memory impairment. We expect Didacini to be launched in the near future, which will further enrich the CNS product pipeline, enhance competitiveness in core fields, and promote innovation and transformation between Beijing and Singapore.
Many measures have been taken together to build an innovative pipeline, and the refinement of new drugs, rehabilitation of new enteric capsules, etc. are progressing smoothly. In terms of innovative drug research and development, we expect that a new class 1 drug for treating insomnia, darcinib, will be approved for marketing in the near future, contributing to the company's performance growth starting in 2024. In addition, the company's self-developed first-class drug, JX11502MA capsule, is undergoing phase IIb clinical trials. The phase II clinical trial of the rehabilitation new enteric capsule, which was developed for the second time based on a variety of rehabilitation solutions with advantages in the digestive tract, has been successfully completed. More than 10 new drug (device) projects are being developed in an orderly manner.
Profit forecast and investment advice: Jingxin Pharmaceutical has built a multi-dimensional and multi-level product hierarchy and development pattern in the three major diseases of the neuropsychiatric system, cardiovascular system, and digestive system. Finished drugs have resumed steady growth, and the first new drug, daxinib, is about to be marketed, which is expected to continue to inject momentum into performance. We expect the company's net profit from 2023-2025 to be 660 million yuan, 7.1 million yuan and 860 million yuan respectively, corresponding to PE 16, 15, and 12 times, respectively, maintaining the “buy” rating.
Risk warning: R&D progress may fall short of expectations, commercialization progress may fall short of expectations, and the impact of volume procurement policies.