Incident: The company released its 2023 annual report. During the reporting period, the company achieved revenue of 210 billion yuan, an increase of 37.55% over the previous year; realized net profit of 555 million yuan, an increase of 93.52% over the previous year; and realized net profit without return to mother of 579 million yuan, an increase of 73.58% over the previous year.
Long-acting interferons drive performance growth, and increasing indications are expected to accelerate release. In 2023, the company's sales revenue of the long-acting interferon Pegobin was 1,790 billion yuan, an increase of 54.2% over the previous year, accounting for 85.2% of total revenue. The company is steadily advancing confirmatory clinical trials for chronic hepatitis B with the goal of clinical cure. The marketing license application for Pegbin combined with nucleoside (acid) analogs for adults with increased indications for chronic hepatitis B was successfully accepted by the State Drug Administration in March 2024. It is expected that after approval of this new indication, it is expected to further enhance Pegobin's competitive advantage in the field of hepatitis B treatment, increase product market penetration, and drive rapid growth in the company's performance.
Long-acting whitening drugs are included in the medical insurance catalogue and are expected to become a new performance growth point. The company's long-acting whitening drug Peijin (generic name: topefigastine injection) was officially approved for marketing on June 30, 2023, and successfully included in the national health insurance catalogue in December 2023. After the long-term whitening drug Peijin is included in the medical insurance catalogue, it will help reduce the financial burden on neutropenia patients related to tumor radiotherapy and improve its clinical accessibility. It is expected to accelerate the release of this product in the future and provide a new source of performance growth for the company.
Promote R&D and innovation in various fields, and actively carry out domestic and international cooperation. The company invested 280 million yuan in R&D in 2023, an increase of 34.96% over the previous year. During the reporting period, the company actively carried out a number of research projects. The Y polyethylene glycol recombinant human growth hormone (YPEG-GH) project completed phase 3 clinical research and was accepted for drug registration in January 2024; Y polyethylene glycol recombinant human erythropotropin (YPEG-EPO) has completed phase 2 clinical research, and preparations are being carried out related to phase 3 clinical study applications; the AK0706 and human interferon α2b spray projects are in phase 1 clinical research. Furthermore, the company and Aligos are collaborating on research and development of oligonucleotide compounds produced based on nucleic acid technology to treat hepatitis, and are actively seeking breakthroughs in the field of clinical treatment of chronic hepatitis B.
Investment advice: We expect the company's revenue growth rates from 2024 to 2026 to be 35.0%, 34.9%, and 23.5%, respectively, with net profit growth rates of 37.9%, 38.9%, and 25.9%, respectively, corresponding EPS of 1.88 yuan, 2.56 yuan, and 3.22 yuan, respectively, corresponding PE of 32.9 times, 24.2 times, and 19.2 times; give the company a valuation level of 35 times PE in 2024, corresponding to a target price of 65.90 yuan/share for 6 months, maintaining the investment rating of buy-A.
Risk warning: Risk of increased competition in the interferon market, risk of interferon collection, risk of clinical trial failure, risk of pharmaceutical policy changes, risk of product sales falling short of expectations.