Description of the event
The company released the report for the third quarter of 2023: in the third quarter of 2023, the company achieved revenue of 1,322 million yuan, a year-on-year decrease of 6.79%; realized net profit of 345 million yuan, an increase of 25.39% over the previous year; and realized net profit of 339 million yuan, an increase of 15.16% over the previous year.
Incident comments
Continuing the trend of the first half of the year, the growth mainly benefited from the CDMO business. In the first three quarters of 2023, the company achieved cumulative revenue of 4,577 billion yuan, a year-on-year increase of 4.66%, net profit of 967 million yuan, a year-on-year increase of 30.08%, and net profit of 952 million yuan, a year-on-year increase of 24.75%. The company continues to promote the strategy of “deepening” major customers and “expanding” emerging customers, improving the matrix management model guided by project operations, deeply expanding the customer pipeline and product pipeline, and rapidly improving R&D capabilities and product delivery capabilities. The performance growth in the first three quarters mainly benefited from the growth of the CDMO business.
Vigorously expand the CDMO business layout. Currently, the company's New Drug Customized Development and Production Service (CDMO) service customers include internationally renowned pharmaceutical companies such as Novartis, Roche, Zoetis, Gilead, and Daiichi Sankyo, as well as well-known domestic R&D pharmaceutical companies such as Betta Pharmaceutical, Hutchison Huangpu, Alice, Haihe Biotech, Luye Pharmaceutical, and Hualing Pharmaceutical. It is one of the most trustworthy partners of global innovative drug development companies. Among the projects undertaken by the company, there are 29 listed projects, 66 phase III clinical projects, and 839 phase I and phase II clinical trials. The projects cover treatment fields such as anti-tumor, anti-heart failure, anti-depression, anti-Parkinson, anti-lung cancer, anti-virus, anti-diabetes, and anti-respiratory infections.
The all-round layout is progressing steadily, and production capacity will be further released. The company has multiple R&D and production bases in Zhejiang, Jiangsu, Guangdong and North America, and will further promote the global R&D capacity layout and advanced production capacity layout of the company's CDMO business.
In the first half of 2023, the main construction of the production workshop and supporting facilities of Ruibo Taizhou (phase I) was completed, and equipment installation has gradually begun; the Zhejiang Ruibo spray-drying production workshop completed the workshop transformation and equipment installation, which will be put into use in the second half of the year; the installation of the main equipment in the synthesis reaction zone of Ruibo's Suzhou pilot plant has been completed, and pipeline construction is being carried out in an orderly manner. Pipeline engineering construction is being carried out in an orderly manner, and it will be put into use in the second half of the year; the pharmaceutical technology workshop has been upgraded and put into use in the second half of the year; the pharmaceutical technology workshop has been upgraded and put into use in the second half of the year; the pharmaceutical technology workshop has been upgraded and put into use in the second half of the year; multiple product transfer verification and production is underway; Ruibo US has carried out the second phase of the pilot workshop installation design work, which will significantly enhance Ruibo's US R&D project Undertaking capacity.
It is estimated that in 2023-2025, the company will achieve net profit of 1,260 million yuan, 15.43 billion yuan and 1,897 billion yuan, corresponding to the current stock price PE, 20/16/13 times, respectively, and maintain the “buy” rating.
Risk warning
1. Product sales fell short of expectations;
2. The progress of the outsourcing transfer fell short of expectations.