Bioengineering revenue is growing rapidly, and operations are improving steadily
In the first three quarters of 2023, the company achieved revenue of 5.134 billion yuan, an increase of 14.22% over the previous year. By business sector, the revenue growth rate for bioengineering, aseptic preparations, testing and packaging, and solid preparations was 30%/7%/-9%/5%, respectively, and the bioengineering sector's performance increased significantly. During the reporting period, the company achieved net profit of 287 million yuan, a year-on-year decrease of 37.91%, mainly due to market price fluctuations. The company is actively promoting cost reduction and efficiency on the R&D design and supply chain side, and product profitability is expected to accelerate. In addition, the company's net operating cash flow for the first three quarters was -181 million yuan, compared to -465 million yuan for the same period last year, a significant improvement over the previous year.
R&D results are being implemented at an accelerated pace, and on-hand orders are performing well
During the reporting period, the company continued to increase investment in R&D, successively implemented a full range of customized hollow fiber ultrafiltration membranes and microfiltration membranes, and independently developed and implemented integrated smart warehousing and logistics systems. As Romaco launches the Tecpharm Cotech Laboratory in China, the company's R&D and innovation capabilities are expected to be further enhanced. Meanwhile, the company's new business is progressing smoothly. Chutian Jingbang, which was newly established at the end of June this year, has now reached 115 million orders. The company's many projects continue to be implemented, and profitability is expected to further improve.
The expansion of the industrial chain is progressing in an orderly manner, and growth resilience is increasing
During the reporting period, the company continued to make efforts to improve the “one vertical, one horizontal and one platform” industry chain layout. Since June 2023, Chutian Pete, Chutian New Materials, and Chutian Boyuan have been established one after another to lay out the three major businesses of peptide synthesis equipment and peptide cracking equipment, pharmaceutical non-metallic components, and intelligent powder system equipment. In 2023, the company plans to raise 1 billion yuan, of which the bioengineering phase I construction project and the medical equipment and materials technology research center project will invest 630 million yuan and 250 million yuan respectively. With the gradual implementation of the project, the company's business layout will be further improved.
Profit forecasting
It is predicted that the company's revenue for 2023-2025 will be 68.01, 7.20, and 8.749 billion yuan, EPS of 0.80, 0.93, and 1.08 yuan respectively, and the current stock price corresponding to PE is 13.7, 11.9, and 10.2 times, respectively. The company is a leading domestic pharmaceutical equipment enterprise. The pharmaceutical industry chain is complete, and the front-end bioengineering competitiveness is outstanding. It is expected that new products will be released at an accelerated pace in the future. Maintain a “buy” investment rating.
Risk warning
Risks of increased market competition, technological innovation falling short of expectations, product delivery falling short of expectations, slow recovery of downstream demand, risk of new orders falling short of expectations, industry policy and government regulation risks, geopolitical risks