Key points of investment:
Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 1,825 million yuan (+70.30%), realized net profit of 501 million yuan (+175.98%), and achieved net profit of 493 million yuan (+195.86%) after deducting non-return to mother.
In the Q4 quarter, the company achieved operating income of 581 million yuan (+182.65%), achieved net profit of 170 million yuan (+661.07%), and realized net profit of 168 million yuan (+604.01%) after deduction of non-return to mother. The performance was in line with expectations.
The dosage of the shingles vaccine is accelerated, and the reduction in influenza calculation affects profits: 1) As the company's basic market, domestic demand is affected by the decline in newborns. The company adjusted its strategy to increase its share of exports. It was first exported to Ghana in 2023 and signed a cooperation agreement with Russia, contributing 820 million yuan in revenue in 2023; 2) In January 2023, the company's exclusive product, the live attenuated herpes zoster vaccine, was approved and marketed. Compared with imported products, it has advantages such as higher safety, greater accessibility, and a wider range of ages. The entry process was completed in 31 provinces, municipalities, and autonomous regions, and achieved sales of 663,500 thousand doses in 2023 (quickly becoming the company's main variety, accounting for 48.4% of revenue); 3) The company's nasal spray influenza vaccine is a seasonal product, which is valid for only 10 months. In 2023, 419,600 units were sold, contributing 122 million yuan in revenue. Due to changes in terminal demand, the company prepared 54 million yuan for asset impairment for products that cannot be sold.
The research pipeline is progressing smoothly: According to the company's announcement, the company's influenza vaccine (liquid dosage form) is in the pre-NDA stage, phase I clinical research has been completed, and preparations for phase III clinical samples of the all-human anti-rabies virus monoclonal antibody are undergoing phase I clinical research; clinical trial applications for diploid rabies vaccine and all-human monoclonal antibodies against tetanus toxins have been approved, and clinical research is about to begin; adjuvant influenza vaccine, recombinant shingles vaccine, HSV-2 mRNA vaccine, and Hib vaccine are scheduled for 2024 The clinical trial declaration process is being carried out; at the same time, the company is actively promoting pre-clinical research on various R&D projects such as RSV vaccines, antibodies, and vaccines to treat Alzheimer's disease.
Profit forecast and valuation: We maintain the previous profit forecast and add the 2026 profit forecast. The company's net profit for 2024-2026 is estimated to be 7.22/9.41/1,182 billion yuan respectively, corresponding EPS of 1.75/2.28/2.86 yuan respectively. The company's live attenuated herpes zoster vaccine is exclusive in China, has a good competitive pattern, huge market space, and maintains a “buy” rating.
Risk warning: Clinical progress of vaccine products falls short of expectations or R&D failure; increased market competition and product sales fall short of expectations; risk of technology iteration; risk of continuing decline in the number of newborns.