Regular business is developing steadily, and non-COVID-19 in-hand orders are growing steadily
In 2023, the company achieved revenue of 40.341 billion yuan, a year-on-year increase of 25.6% after excluding COVID-19 commercialization projects; net profit to mother was 9.607 billion yuan, up 9.0% year on year; net profit after deducting non-return to mother was 9.748 billion yuan, up 16.8% year on year. Looking at Q4 alone, the company achieved revenue of 10.799 billion yuan, down 1.5% year on year; net profit to mother was 1,530 billion yuan, up 6.6% year on year; net profit without return to mother was 2,038 billion yuan, up 0.5% year on year.
The company's performance grew steadily. Excluding COVID-19 commercialization projects, the number of on-hand orders in 2023 increased by nearly 18% year-on-year.
Considering the slowdown in industry demand, we lowered our 2024-2025 profit forecast and added a 2026 profit forecast. We expect net profit for 2024-2026 to be 104.01/112.97/12.888 billion yuan (originally estimated at 125.08/16.341 billion yuan), EPS is 3.55/3.85/4.38 yuan, and the PE corresponding to the current stock price is 14.2/13.1/11.5 times. Given that the company pioneered the CRDMO business model and continues to maintain its leading position in the industry, the “buy” rating .
The TIDES business grew strongly, and the testing and biology business grew steadily. In 2023, the company's chemical business achieved revenue of 29.171 billion yuan, an increase of 1.1% year on year, and a 36.1% year on year increase excluding COVID-19 commercialization projects. The company is actively expanding emerging businesses such as oligonucleotides and peptides. In 2023, TIDES's business revenue was 3.41 billion yuan, up 64.4% year on year; by the end of December 2023, TIDES's active orders had a strong year-on-year increase of 226%, and the new 32000L peptide production capacity was put into use in January 2024. At the same time, the company has the world's largest drug discovery biology platform and a powerful comprehensive analysis and testing platform, and the clinical CRO and SMO business continued to grow; in 2023, the company's testing business and biology business achieved revenue of 65.4/2.55 billion yuan respectively, an increase of 14.4%/3.1% over the previous year, which has become a strong collaborative support for the chemical business.
The DDSU business has a forward-looking layout. Three new drugs developed for customers have been approved for the DDSU business. Listed companies have helped several CGT projects submit BLA, achieving revenue of 1.31 billion yuan in 2023, an increase of 0.1% over the previous year; the 2nd commercial product was approved in February 2024. Since 2013, the company has been laying out domestic new drug research and development business to create an integrated new drug research and development service model with IP creation as the core. In 2023, the company completed IND declarations for 18 projects and obtained clinical trial approvals (CTAs) for 25 projects; 3 new drugs developed by the company for customers have been approved for marketing, and 2 new drugs are in the NDA stage.
Risk warning: Order delivery falls short of expectations, increased market competition, environmental protection and production safety risks.