The main business is steady, and specialty products continue to grow. 2023H1 achieved operating income of 3.78 billion yuan, an increase of 22.3% year on year; 2023H1 achieved net profit of 980 million yuan to mother, an increase of 1.4% year on year. Revenue from the 2023H1 biological products sector increased 20% year over year; revenue from the hair health sector increased 36% year over year, and 618 and Double Eleven promoted e-commerce sales again at the top of the list; CDMO revenue increased 72% year over year.
The core product Terbiao continues to rank first in the platelet raising market in terms of sales. Terbiao is the world's only commercialized recombinant thrombocytopoietin launched in 2005. Sales increased by 28.2% year-on-year in the first half of 2023, mainly due to the fact that the medical insurance negotiation price of Terby Australia did not drop in 2023. Furthermore, the amount of products with favorable policy environments obtained in 2023 was included in the “China Expert Consensus on the Diagnosis and Treatment of Chemotherapy-Related Thrombocytopenia in China”, and the coverage of treatment groups has been further expanded. On a proportional basis, Terby Australia products contributed close to 4 billion yuan in reported revenue this year, and Turbie Australian products accounted for half of the total group's revenue.
Mandy is the leading safe and effective topical hair growth medicine. The hair loss market has huge potential and is not being met. Androgenic alopecia is the main type of hair loss. Currently, the FDA has approved only two drugs to treat male prolapse. Mandy accounts for 70% of the market in medical institutions, ranking first in the Minoxidil market. 2023H1 Mandy achieved revenue of 498 million yuan, an increase of 35.8% over the previous year, and estimated annual sales of 1.1 billion yuan. Furthermore, the foam was already on the market in January 2024. The price is more expensive, and it will continue to contribute to revenue in the hair sector.
Pipeline reserves are abundant, and products have been approved one after another. 1) Minoxidil foam was approved for marketing in January 2024 to fill the gap in medication demand for people with sensitive scalp. 2) The drug nafurafine hydrochloride in collaboration with Japan's Toray was approved in July 2023 to improve pruritus in hemodialysis patients (only when existing treatments are not effective). It is the first and only selective opioid kappa receptor agonist approved by the National Drug Administration for refractory pruritus in hemodialysis patients. 3) The subsidiary Sansheng Guojian's recombinant anti-IL-17A humanized monoclonal antibody, a phase III study to treat moderate to severe plaque psoriasis reached the end of all efficacy, and the NDA is expected in 2024. 4) Long-acting EPO SSS06 is currently in clinical phase III and is expected to be marketed in 2025. 5) BD introduced the topical acne drug clacoterone, which is currently undergoing bridging tests and is expected to be marketed in 2026.
Investment advice: TPO is the company's core product, and the price is stable after the medical insurance is renewed. Mandy foam has been approved for marketing, improving consumers' skin feel and compliance, and is expected to continue to be released. The subsidiary Sansheng Guojian is deeply involved in the field of self-protection. It is a commercial leader in the field of self-protection, with strong R&D capabilities and an adequate product pipeline. A number of products will soon be commercialized. The company is expected to achieve operating income of 77.01/88.01/99.25 billion yuan in 2023-2025, and achieve net profit of 21.06/22.55/ 2,378 billion yuan, corresponding to 2023-2025 PE 5/5 times. Covered for the first time, giving it a “Recommended” rating.
Risk warning: Market competition increases risk; generic drug risk; policy change risk; collection risk; risk of product development falling short of expectations.