On March 21, 2024, the company released its 2023 annual report. In 2023, the company achieved revenue of 7.703 billion yuan, -6.99% year on year; net profit to mother was 445 million yuan, +16.05% year on year; net profit without return to mother was 335 million yuan, +33.45% year over year.
Looking at a single quarter, the company achieved revenue of 2,092 billion yuan in Q4 of 2023, +0.14%; net profit to mother of 59 million yuan, +458.75% year over year; net profit after deducting non-return to mother of 25 million yuan, +388.53% year over year.
Marketing changes have begun, and the effects of integration are beginning to show. The company carried out business restructuring and established three core business divisions “KPC1951, Kunming Traditional Chinese Medicine 1381, 777”. The KPC1951 Division continues to make efforts in the field of geriatric health and chronic disease management, actively expanding grass-roots and clinic channels, seizing the procurement and bid window, and steadily increasing the number of core products. Hessuketone for injections (freeze-dried) +22.65%; Hesketong oral products were +19.44% compared to the same period, of which Hessuketong softgels were +33.04% compared to the same period, and Hessuketong tablets were +15.09% compared to the same period last year. Kunming Traditional Chinese Medicine 1381 increased terminal coverage and focused on creating a strong single product. The core variety was Shu Gan Granule +11.11%; respiratory diseases such as influenza and mycoplasma pneumonia were high. The company had a high incidence of respiratory diseases such as influenza and mycoplasma pneumonia. The same ratio was +44.32% for the company's oropharyngeal cleansing pills, +21.19% compared to the same period for lung clearing and phlegm relief pills.
Overseas travel and innovation continue to advance, empowering the company's future growth. The company's self-developed product, dihydroartemisinin piperaquine phosphate tablets 40mg/320mg, has passed WHO pre-certification, which is conducive to speeding up the international layout. The company invested a total of about 126 million yuan in research and development, and the self-developed class 1 drug KYAZ01-2011-020, which is suitable for ischemic stroke, is progressing smoothly into clinical phase II.
The clinical phase I climbing phase study of KYAH01—2016-079, a class 1 innovative drug suitable for isocitrate dehydrogenase-1 (IDH1) gene mutation, has completed enrollment in 3 dose groups.
The goals of the five-year strategic plan are clear, and I am optimistic that the company will continue to improve its brand power. In the bill on the company's strategic plan (2024-2028), the company proposed the strategic goal of “striving to double operating income by the end of 2028, reach 10 billion yuan in industrial revenue, and become the first stock in the Yinfa Health Industry through endogenous development plus extended expansion”. The goals are clear, the measures are clear, and the measures are clear, showing full confidence in development.
The integration between the company and China Resources 39 is gradually improving, and we are optimistic about the company's development prospects. Considering that brand building still requires continuous investment, we lowered our 24-25 profit forecast. The net profit forecast for 24-25 was 744/881 million yuan. The net profit for 2024-2026 is estimated to be 583/7.18/909 million yuan, respectively, up 31%/23%/27% year over year, EPS is 0.77/0.95/1.20 yuan, respectively, and PE corresponding to the current price is 27/22/17 times, respectively, maintaining the “gain” rating.
Product collection risk, product promotion falling short of expectations, health insurance drug price limit risk, brand value change risk, raw material price fluctuation risk, etc.