The company disclosed the three-quarter report for 2023: the first three quarters achieved revenue of 15.743 billion yuan (+13%, the following are the year-on-year caliber); net profit of 1,963 billion yuan (+40%); net profit of 1,963 billion yuan (+40%); net profit after deduction of 1,922 billion yuan (+40%). It is mainly due to the optimization of the company's infusion variety structure, the release of biological products in Chuanning, and the transaction revenue of Colon Botai. Sales, management, and R&D expenses for the first three quarters of 2023 were 3,249 billion yuan (-4%), 707 million yuan (-18%), and 1,666 billion yuan (+38%), respectively.
Looking at a single quarter, 2023Q3 had revenue of 4.945 billion yuan (+4%), net profit of 560 million yuan, net profit of 560 million yuan, and net income of 571 million yuan deducted from non-attributable net profit. Performance slightly exceeded expectations, and steady growth is expected throughout the year.
Infusion product structure is optimized, and non-infusion formulations maintain toughness. According to the company's 2023 semi-annual report, the infusion business is expected to grow rapidly throughout the year thanks to the restoration of normal demand for diagnosis and treatment and the active development of admission work. At the same time, the company continues to promote the process of replacing semi-closed infusions with sealed infusions, which will improve overall profitability. Non-infusion formulations may be affected by reduced collection prices and increased competition for androgenic products. As the commercialization of new products progresses, the core business is expected to resume steady growth.
APIs have achieved steady growth in reducing costs and increasing efficiency. Thanks to the release of core products such as penicillin and good cost control, Chuanning Biotech is also expected to achieve relatively rapid growth throughout the year. At the same time, the company has completed process verification for some synthetic biology products, which is expected to become Chuanning Biotech's second growth curve.
ADC reached a major cooperation of 10 billion dollars, and innovative research and development went smoothly. According to the Colon Botai prospectus, Colon Botai has reached a number of ADC-related deals with MSD, with a total transaction volume exceeding 10 billion US dollars. Currently, the marketing application for the SKB264 third-line treatment of TNBC has been included in the CDE's priority review. The treatment of EGFR mutation NSCLC treated by EGFR TKI is in phase III at home and abroad. Phase I/II data for HR+/HER2- BC treatment was presented in an oral report at the 2023ESMO conference. Meanwhile, according to the company's announcement on September 10, A140's listing application has also been accepted by the CDE.
Profit forecasts and investment advice. The company's 2023-2025 EPS is expected to be 1.67 yuan/share, 1.90 yuan/share, and 2.14 yuan/share, respectively. The company's core business is growing steadily, and innovative achievements are gradually being implemented. Referring to comparable companies, the company was given a PE valuation of 25 times in 2024. The corresponding reasonable value was 47.39 yuan/share, maintaining the “buy” rating.
Risk warning. There is a risk of failure in the development of new drugs. Prices of APIs fluctuate, and price reductions in collection have exceeded expectations.