Various cardiovascular and spiritual products lead the market, and marketing reforms have opened up markets outside the hospital. The company's existing formulation products are basically included in the collection. On the one hand, the impact of the price reduction in collection is clear, and on the other hand, it uses collection to achieve a rapid increase in market share. At the same time, the company carried out marketing reforms in 2023, changing the three major product lines to two major divisions: hospitals and retail, strengthening cooperation with pharmacy chains outside the hospital to find incremental space for core varieties outside the hospital.
Dacinib, a new drug for insomnia, has been approved for marketing, which significantly improves sleep while being safe. The incidence of insomnia among adults in China is high. Commonly used drugs to treat insomnia have safety issues such as addiction and daytime damage. In December 2023, the company's new drug for insomnia, Dacinib, was approved for marketing. According to registered clinical data, didacinib can significantly improve sleep and has good safety. Based on the large domestic population of insomnia patients and product safety advantages, didacinil is expected to be rapidly released after marketing.
CMO for traditional Chinese medicine, devices and preparations is growing steadily, and multi-wheel drive companies are developing positively. In recent years, the company's new business segments such as traditional Chinese medicine, equipment and pharmaceutical CMO have achieved steady growth. In terms of traditional Chinese medicine, Shaxi Pharmaceutical has acquired a rich product matrix and built a new production base in Inner Mongolia; in terms of equipment, the subsidiary Jufeng shows that the domestic market share exceeds 50% and is expected to be the first to benefit from the increased release of new medical infrastructure; the pharmaceutical CMO sector has reached dozens of cooperative contracts, and some projects have entered the commercialization stage, adding 3 billion solid dosage production capacity to help the CMO business develop rapidly.
Profit forecast and rating: We expect the company to achieve revenue of 40.03/45.14/5.206 billion yuan in 2023-2025, up 5.9%/12.8%/15.3% year on year, and net profit of 6.77/7.56/929 billion yuan, up 2.2%/11.8%/22.8% year on year. Considering the market volume of didacinil, multi-wheel drive has been growing steadily in the traditional Chinese medicine, equipment and other sectors, and for the first time, it has been covered with a “buy” rating.
Risk warning: Competition in the formulation market intensified, product sales fell short of expectations; progress in new product development and approval fell short of expectations; competition in the API market intensified.