Incidents:
Walter released its 2023 annual report on March 16, 2024: in 2023, the company achieved revenue of 2,484 billion yuan, up 6.11% year on year; realized net profit of 585 million yuan, up 11.08% year on year; realized net profit deducted from mother of 571 million yuan, up 7.86% year on year.
Investment highlights:
Focus on the main pharmaceutical business and achieve steady growth in business performance. In 2023, the company achieved main business revenue of 2,484 billion yuan, an increase of 6.11% over the previous year, and achieved net profit of 585 million yuan, an increase of 11.08% over the previous year. Among them, the main pharmaceutical industry maintained a good development trend and achieved annual operating income of 2,426 billion yuan, an increase of 18.88% year on year, and net profit of 1,182 billion yuan, an increase of 21.58% year on year.
The main business categories are rich and comprehensive. Currently, Dyne Pharmaceuticals' children's drugs mainly include iKexin Vitamin AD drops, D-D, dyne iron, dyne calcium, dyne zinc, oral rehydration salts, pediatric ibuprofen suppositories, atomoxetine hydrochloride oral solution, and desloratadine oral solution. Among them, “Yikexin” is a well-known trademark in China, and it has been ranked first in the market share of similar products for many years. Using the broad influence of “Ecoxin”, the company has built a series of children's health products such as “Icexin” children's nutrition products, children's health foods, and children's health products.
Profit forecasts and investment ratings. We expect the company's revenue in 2024-2026 to be 2,869 million yuan, 32.62 billion yuan, and net profit to mother of 708, 8.13, and 904 million yuan, corresponding PE of 11.65x, 10.14x, and 9.12x. As the company continues to focus on its core business, its innovative strength is gradually strengthened, its product coverage is gradually comprehensive, and the drive for endogenous growth is continuously strengthened. The first rating was given a “buy” rating.
Risk warning. The risk of price reduction in collection, falling short of expectations of new product releases, falling short of expectations in R&D progress, falling short of expectations in sales, and risk of changes in industry policies.