Incident: The company released its 2023 annual report, achieving operating income of 2.1 billion yuan (+37.6%), net profit attributable to shareholders of the parent company of 550 million yuan (+93.5%), and net profit of 580 million yuan (+73.6%) attributable to shareholders of listed companies after deducting non-recurring profit and loss.
Pegbin's sales revenue grew rapidly, and profit margins increased rapidly. The company's rapid revenue growth in 2023 is mainly due to the continuous deepening of clinical treatment research on hepatitis B. As a first-line drug for chronic hepatitis B antiviral treatment, Pegobin's effects in improving the clinical cure rate of hepatitis B patients and reducing the risk of liver cancer has been further recognized by experts and patients. The rapid increase in net profit attributable to shareholders of listed companies is mainly due to the rapid increase in Pegbin's sales revenue while continuing to improve management standards, reduce overall expense rates, and raise profit levels. The gross profit margin was 93.3% (+4.4pp); net profit margin after deduction was 27.6% (+5.7pp), and profit margin increased rapidly. The cost ratio is well controlled, with a R&D cost rate of 11% (+1.2pp), a sales expense ratio of 40.4% (-5.7pp), and a management fee ratio of 10% (+0.9pp).
Continue to increase investment in R&D and steadily advance the research pipeline. R&D investment of $280 million (+34.96%) in 2023.
In 2023, the company's next-generation long-acting recombinant human granulocyte colony stimulating factor “topefigastine injection” (Pegin) was approved for marketing in June 2023. At the same time, the company is steadily advancing several research projects. Y polyethylene glycol recombinant human growth hormone (YPEG-GH) completed phase III clinical trials and was accepted for drug registration in January 2024; Y polyethylene glycol recombinant human erythropotropin (YPEG-EPO) has completed phase II clinical research and is undergoing phase III clinical application preparation; AK0706 and human interferon α2b spray projects are in phase I clinical; the ACT50 and ACT60 projects are undergoing pharmacy and pre-clinical research.
Profit forecast and investment advice: The company's net profit due to mother in 2024-2026 is estimated to be RMB 790, RMB 1.07 billion, and RMB 1.37 billion, respectively. The company is a leader in curative hepatitis B drugs. It includes 7 high-value products in the research pipeline, and its performance is growing rapidly. Investors are advised to pay attention.
Risk warning: industry policy risk, risk of R&D falling short of expectations, risk of product commercialization falling short of expectations, etc.