Incident: The company released its 2023 annual report, achieving operating income of 400 million yuan (+7.1%); net profit attributable to shareholders of listed companies was 0.3 billion yuan. The fourth quarter of 2023 achieved operating income of 100 million yuan (+14.3%); net profit attributable to shareholders of listed companies was a loss of 10.266 million yuan.
Benvermode achieved relatively rapid growth, and the new indications for atopic dermatitis are in phase III clinical trials. Benvermode achieved rapid growth with revenue of 494.38 million yuan (+43.9%) in 2023. In the treatment of psoriasis, clinical results show that benvilimod cream has the advantages of good treatment effect and few adverse reactions. The drug not only has better curative efficacy than positive controls, but also has a low recurrence rate after discontinuation, a long remission period after cure, and is safe and effective for long-term use. Benverimod cream was successfully shortlisted in the 2020 health insurance negotiations. The medical insurance payment standard was: 138 yuan (10g: 0.1 g/bottle). The contract was successfully renewed in 2023, leaving the original medical insurance payment standard unchanged, reflecting the country's affirmation and support for the clinical value of Benvermod cream. In addition to psoriasis, Benvermode also has broad application prospects in many important disease fields, including the treatment of atopic dermatitis, allergic rhinitis, and ulcerative colitis. The new indications for atopic dermatitis are in phase III clinical phase.
New products and cell technology services in the field of biomaterials have maintained rapid growth. In 2023, thoracic surgery repair membranes increased 29.2% year over year; sterile biological wound care membranes increased 15.8% year over year; type B hard (spine) membrane patches and breast patches increased 20.9% and 7.6% year over year, respectively; cell technology services increased 24.3% year over year. In 2023, the company's meningeal products successively won the bid for the Eight Provinces and Two District Alliances of Shaanxi Province. The product coverage rate was further increased in the collection area. Market development for the company's proxy products such as intracranial pressure monitoring products, operating tables, and multi-functional headrests progressed steadily, and the lacrimal duct embolism project obtained a medical device product registration certificate.
The research project continues to advance, and the “biological artificial liver” has completed the project acceptance. The “biological artificial liver” project acceptance was completed, and the safety and efficacy of biological artificial liver technology was verified through relevant research; in addition, the company is conducting preliminary research in the direction of “mesenchymal stem cells in the treatment of various diseases” and has cooperated with many medical institutions to promote clinical research and filing of mesenchymal stem cell treatment projects; at the same time, the company is actively promoting the application of the “Human Genetic Resources Sample Bank”, which will provide important scientific and technological platform support for future innovation and development in the fields of new drug research and development, medical translational research, and biological and health services.
Profit forecasting and investment advice. The company's net profit for 2024-2026 is estimated to be 0.6/0.8/100 million yuan, respectively, and the corresponding PE is 48X/33X/27X. The company Benvermode is expected to usher in rapid growth, increasing contributions from cell technology services and new biomaterial products. Maintain a “buy” rating.
Risk warning: the risk that the amount of benvimod falls short of expectations, the risk of not winning the bid or the price reduction exceeding expectations for volume procurement of consumables, and the risk of R&D failure.