Incidents: The company's revenue for January-September was 930 million yuan, +12.3%, net profit of 180 million yuan, +39.8%; 23Q3 single-quarter revenue was 3.1 billion yuan, -1.0%, and net profit was 0.6 billion yuan, +22.8% yoy.
Expense rate: The company's sales/management/R&D/financial expenses in January-September were 27.2%/6.6%/6.6%/-0.3%, respectively, compared to -1.7 pct/-1.6 pct/0.9 pct/-0.04 pct. Thanks to the improvement in the company's sales and management efficiency, the overall cost ratio has declined, leading to a significant increase in net interest rates over the same period last year.
Business segmentation: The company's revenue split from January to September, pig vaccine was 330 million yuan, +9% year over year; affected by the downturn in downstream farming; poultry vaccines and antibodies, 300 million yuan, +10%; ruminant vaccine, 900,000 yuan; chemicals, 270 million yuan; chemicals, 270 million yuan, +20% year on year. Since the outbreak of the epidemic in various regions since this year was more serious than last year, the company's disinfectant sales increased significantly year over year, driving the sector's growth rate higher than the overall rate; 6.4 million yuan for pet health products, +322% year on year; the company will continue to supplement the pet sector in the future Product matrices.
Firmly establish sales strategies for large products and customers: The company's January-September large single product ring series vaccine had a higher year-on-year growth rate than the pig vaccine as a whole. The year-on-year growth rate of sales of pig products (vaccines+chemicals) of Top30 Pig Breeding Group customers was higher than the overall growth rate, and the share of sales of Top30 pig breeding group customers in pig products continued to increase. In the future, the company expects the customer penetration rate of large groups to continue to increase.
Product development situation: 1) African swine fever vaccine: The African swine fever subunit vaccine project developed by the company in cooperation with the Lanzhou Veterinary Research Institute is in the emergency evaluation review process, and the Central Supervisory Office is in the process of comparing experimental plans; 2) Live swine pseudorabies vaccine (HN1201-R1): the company's independent research and development, is about to enter the new veterinary drug registration review and testing stage, and is expected to become the first approved live vaccine for swine pseudorabies; 3) A five-link inactivated vaccine for poultry, such as a new tributary gland and new tributary adenoma; 4) The triple vaccine: the emergency evaluation is about to pass It is expected that it will go on sale early next year.
Investment suggestions: According to the downstream farming boom situation and the company's business expectations, we adjust the profit forecast. The estimated net profit of the company from 2023-2025 is 2.42, 3.16, and 367 million yuan respectively. Based on the closing price on November 6, 2023, the corresponding PE is 29.7, 22.7, and 19.6 times, maintaining the “increased holding” rating.
Risk warning: risk of recurrence of animal outbreaks, product development risk, biosafety risk, product quality risk, policy change risk, etc.