2023 results are in line with our expectations
The company announced its 2023 results: revenue of 1,825 billion yuan, up 70.30% year on year; net profit to mother was 501 million yuan, up 175.98% year on year. The main company released the shingles vaccine rapidly, and the performance was in line with our expectations. The company plans to pay a cash dividend of 1.5 yuan for every 10 shares.
Development trends
The shingles vaccine boosted the company's rapid growth in performance. On a quarterly basis, the company achieved revenue of 179 million yuan/380 million yuan/684 million yuan/581 million yuan respectively, up 30%/25%/61%/183% year-on-year respectively. The main shingles vaccine contributed significantly to the increase in performance since 3Q.
By product, the shingles vaccine contributed 883 million yuan in revenue in 2023, accounting for 48% of the company's revenue, corresponding to sales of 660,000 doses; the chickenpox vaccine revenue was 820 million yuan, down 14% year on year, corresponding to sales of 6.71 million doses; the nasal spray influenza vaccine revenue was 122 million yuan, up 7% year on year, corresponding to sales of 420,000 doses. At present, the company has 80 shingles promoters, and has completed coverage in 30 provinces and cities across the country, and has used dealers in various regions to establish online and offline full-platform sales channels. We recommend paying attention to the pace of future sales of this product.
The shingles vaccine is driving the company's fee rate improvement. According to the company's announcement, in 2023, the company's main business gross profit margin was 90.2%, up 3.0 percentage points year on year; sales expenses ratio was 35.5%, down 3.0 percentage points year on year; management expenses ratio was 8.7%, down 4.8 percentage points year on year; R&D expenses rate was 10.9%, down 1.6 percentage points year on year; and net profit margin was 27.5%, up 10.5 percentage points year on year.
The innovation pipeline is rich in reserves, and R&D is progressing in an orderly manner. According to the company's announcement, the company invested 199 million yuan in R&D in 2023, an increase of 28% over the previous year. The company currently has a number of assets under development: the liquid nasal spray influenza vaccine is about to apply for marketing approval; the component DPT vaccine has completed phase I clinical research and is currently preparing phase III clinical samples; the diploid rabies vaccine and tetanus monoclonal antibody IND applications have been approved; adjuvant influenza vaccine, recombinant shingles vaccine, HSV-2 mRNA vaccine, and HiB vaccine will be declared IND in 2024; the company's other pipelines are in the pre-clinical stage.
Profit forecasting and valuation
We remain unchanged in our 2024 and 2025 earnings forecasts. The current stock price corresponds to the 2024/2025 price-earnings ratio of 29.5 times/22.9 times. We maintain our industry rating and target price of 66.0 yuan, corresponding to 36.9 times and 28.6 times 2024/2025 P/E and 0.8 times 2024 PEG, with 25.1% upside compared to the current stock price.
risks
Vaccine safety risks fall short of expectations in the research and pipeline.