Event: The company released its three-quarter report for 2023. The company achieved revenue of 1.91 billion yuan (+54.1%), net profit of 270 million yuan (+164.4%), net profit of 270 million yuan (+164.4%), and net profit of 220 million yuan (+156.1%) after deducting non-return net profit of 220 million yuan (+156.1%).

Revenue growth is in line with expectations. On a quarterly basis, Q1/Q2/Q3 achieved revenue of 56/6.7/680 million yuan respectively, -19.1%/+363.9%/+68.1% year-on-year. Revenue for the first three quarters showed a quarterly upward trend, in line with previous expectations. The company's gross profit margin for the first three quarters was 74.8%, -3.4pp compared to -3.4pp. The gross margin declined slightly, which is expected to be mainly due to changes in revenue structure. On the cost side, the company's R&D expenses/sales expenses/management expenses in the first three quarters were 37/7/140 million yuan respectively, accounting for 19.4%/36.9%/7.4% of corresponding revenue, respectively, -12.4 pp/-26.5 pp/7.1 pp. As post-mining revenue continued to grow rapidly, the company's expense ratio gradually declined.

Combining the above factors, the company's net interest rate for the first three quarters was 14%, +47.4pp over the same period last year.

The European BLA application for third-generation insulin has been accepted, and we continue to promote insulin overseas. The company Gansin/Lyophil/Menthol Insulin has submitted a listing application to the European EMA and was accepted in August and October 2023, respectively.

Previously, the company's insulin preparation, BLA in the US, was accepted in the first half of 2023. The company's insulin exports to Europe and America, and is expected to achieve critical progress in 2024.

Profit forecasts and investment advice. The 2023-2025 EPS is expected to be 0.53 yuan, 1.13 yuan, and 2.03 yuan respectively. We are optimistic about the company's insulin volume after domestic collection plus the growth potential for overseas exports to Europe and the US, and maintain the “hold” rating.

Risk warning: risk of falling product prices, development pipeline progress or failure to meet market expectations, market competition risk.