Performance has grown strongly, turning losses into an inflection point. Recently, the company announced its 2023 performance forecast. Net profit due to mother is expected to reach 1,127 billion yuan to 1,317 billion yuan, an increase of 539%-613% over the previous year; deducted non-net profit is expected to reach 1,156 million yuan to 1,276 billion yuan, an increase of 60%-77% over the previous year. The increase in the company's performance was mainly due to multiple reasons: 1) the profit and loss from changes in the fair value of financial assets held by the company increased by 1,064 billion yuan compared to the same period of the previous year; 2) the base was lower due to the payment of large R&D project license fees in 2022. At the same time, the company made every effort to expand the product market and increase sales revenue and profit compared to the same period of the previous year; 3) the company's calculated asset impairment losses decreased compared to the same period last year. Excluding the influence of this factor, net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss increased 8% to 20% year-on-year.
Mainly traditional Chinese medicine, chemical medicine and biological medicine are developing in many directions. Traditional Chinese medicine is the company's key development direction. The main products include compound salvia pills, astragalus viridis pills, injectable yiqi fumai, injectable salvia polyphenolic acid, etc., which focus on the field of cardiovascular and cerebrovascular treatment. Among them, the core product compound salvia has the effects of activating blood circulation and relieving qi and pain. It is used to treat coronary heart disease, angina pectoris, and non-proliferative diabetic retinopathy. It has been approved for more than 20 years and has been trusted by clinicians and patients for its remarkable curative effects, good safety, and stable quality. The sales volume for the first half of 2023 exceeded 1.5 billion yuan. In addition, the company's products cover chemicals and biopharmaceuticals. The chemical field is leading in many fields through emulation; the biopharmaceutical field actively innovates research and development, and has now built an echelon-style product portfolio.
The development of new products goes hand in hand with the secondary development of products already on the market. The company is actively developing new drugs. Currently, Anshen drops, pain relief tablets, Qingshu granules, Antewei granules, and PXT3003 have entered clinical phase III. The novel TSL-1502 capsules are in clinical phase I/II, and B1344 injections are in clinical phase I. At the same time, the company is actively developing the marketed product for the second time. The core product compound salvia is being used to treat chronic stable angina pectoris and AMS is in phase III clinical trials, and the clinical trial of the biological product Puyuk for heart failure has reached phase III.
Considering the gradual improvement in the company's operating efficiency, the company's expense ratio was slightly lowered, and the company's earnings per share for 2023-2025 were 0.79/0.85/0.93 yuan respectively (the original forecast value was 0.74/0.83/0.93 yuan). According to comparable companies, we believe that the current reasonable valuation level of the company is 21 times the price-earnings ratio of 2024, and the corresponding target price is 17.85 yuan, maintaining the purchase rating.
Risk warning
Risk of collection exceeding expectations, risk of sales falling short of expectations, risk of new product development falling short of expectations, etc.