Brief performance review
On January 31, 2024, the company announced its 2023 annual results forecast. In 2023, the company expects to achieve net profit of 2,812 billion yuan to 2,862 billion yuan, an increase of 13% to 15%; it is expected to achieve net profit without return to mother of 2,735 billion yuan to 2,784 billion yuan, an increase of 14% to 16%; in a single quarter, the fourth quarter of 2023 is expected to achieve net profit of 6.23 to 673 million yuan, an increase of 20% to 30%; 100 million yuan, a year-on-year increase of 13% to 22%.
Management analysis
The innovation and transformation strategy continues to advance, and the four major business segments are growing positively. The company continues to promote innovation and transformation strategies, has made continuous positive progress in R&D, and all production and operation tasks have been carried out steadily. All four major business segments have achieved positive growth, and business quality and capacity have been further improved. The overall business in the medical and aesthetic sector continued to develop rapidly, and revenue reached the highest level in history. According to the company's previous announcement, the wholly-owned subsidiary Hinkley Aesthetics continues to deeply cultivate the Chinese market, and the core star product Ellansé? Lee Yeon-si? Currently, there are more than 600 contracted partner hospitals in China, and the number of trained and certified doctors exceeds 1,200. In the future, the company will continue to deepen and refine the high-end regenerative injection market, appropriately expand the market coverage of second-tier cities, build brand and reputation advantages, and continue to expand the domestic high-end medical and aesthetic market.
Innovative research and development is progressing smoothly, and there is strong certainty that incremental performance will be implemented. The company's innovative drugs adhere to a differentiated research and development strategy, focusing on the three major fields of endocrinology, autoimmunity and oncology. Among them, somituximab injections (ELAHERE? ), injectable linacip (ARCALYST?) It is expected that products such as mevaltinib tablets, CAR-T products zevorkiolense injections, and senapalil will be marketed or applied for marketing in 2024. In addition, with the GLP-1 target as the core, the company has established a product pipeline covering a variety of dosage forms, including long-term and multi-target global innovative drugs and biosimilar drugs. Among them, the oral small molecule GLP-1 receptor agonist HDM1002 tablets are currently in phase Ib clinical phase Ib clinical phase; simeglutide injection diabetes indications have now completed clinical phase III subjects and are expected to complete phase III clinical trials; the dual-target agonist HDM1005 has submitted an IND application; the long-acting three-target agonist DR10624 is developing a phase I list in China Secondary dose escalation (SAD) studies, and simultaneous phase I SAD and multiple dose escalation (MAD) trials were carried out simultaneously in New Zealand. The company's R&D work is progressing smoothly, and there is strong certainty that future performance will increase.
Profit Forecasts, Valuations, and Ratings
We maintain our profit forecast for 2023-2025, and expect the company to achieve net profit of 2.85 billion yuan (+14%), 3.52 billion yuan (+24%), and 4.26 billion yuan (+21%), respectively. In 2023-2025, the company's corresponding EPS was 1.62, 2.01, and 2.43 yuan, respectively, and the corresponding PE was 18, 14, and 12 times, respectively. Maintain a “buy” rating.
Risk warning
Product development progress falls short of expectations; risk of net interest rate decline due to increased competition in the product market; risk of marketing falling short of expectations, etc.