The 2023 results are largely in line with our expectations
The company announced 2023 results: operating income of RMB 90.78 million, up 88.3% year on year; net profit to mother - RMB 421 million. The 23-year results are basically in line with our expectations.
Development trends
Sales of contizolamide continued to grow, and product distribution efforts will continue to increase in 24 years. The company's sales for oral contizolamide tablets in '23 were 1728/2483/2616/22.5 million yuan respectively. Sales showed a month-on-month growth trend in the first three quarters. 4Q23 sales declined slightly due to industry policies, but the annual sales guidance was in line with the company's previous sales guidelines of RMB 80 million to RMB 100 million. Product terminal sales increased 102% year on year in '23. Contizolamide tablets participated in national health insurance negotiations at the end of '23, and the price of implementing the new medical insurance catalogue in January '24 remained the same as in '23. The sales company for contizolamide has now formed a team of about 100 people to commercialize the product. In '24, the company plans to increase the distribution of the product and further increase the coverage rate of contizolamide hospitals across the country.
Follow the clinical completion status of the MRX-4 injection form during the year and the overseas clinical progress of contezolamide & MRX-4. In July '23, the company launched phase III clinical trials of contizolamide tablets in children with complicated skin and soft tissue infections (SSTIs), and in September '23, the injectable MRX-4 launched phase III clinical trials in China. The company plans to complete phase III clinical trials within 24 years and submit applications for product marketing in the past. We expect that the future launch of injectable dosage will help increase hospital coverage, and product volume will usher in structural improvements. In July '23, the first patient was enrolled in the Chinese clinical trial of MRX-4 sequential contezolamide to treat diabetic foot infections. The company expects that this global phase III clinical enrollment will be completed in '26 and an application for marketing will be submitted in the US. We recommend paying attention to overseas clinical trends of the product.
The financial situation is stable, the three fees are controlled reasonably, and more products will enter the advanced clinical stage. The phase I clinical trial of the borane drug MRX-5 to treat mycobacteria without tuberculosis began in Australia in November 23. The company expects MRX-5 to start related clinical trials in the US within 24 years. Domestic MRX-5 and MRX-8 are exploring more clear treatment plans. In 23, due to the clinical progress of ongoing research projects and the expansion of the company's R&D team, R&D expenses increased, an increase of 194 million yuan compared to '22. We believe that the company has a differentiated layout of various products, more projects have entered the clinical development stage, and it is recommended to pay attention to the clinical layout of more products.
Profit forecasting and valuation
We kept our 24/25 revenue forecast unchanged at RMB 166.260 million. As the company develops more phase III clinical trials at home and abroad and more products enter the clinical phase, we are expecting future expenses to expand, so we lowered our net profit forecast for 23/24 from -4.18/-3.68 to -4.47/- 467 million yuan, respectively. Using the DCF valuation method to maintain outperforming industry ratings, the company's products have more entered the advanced clinical stage, and pipeline value has increased. We have kept our target price of 8.55 yuan unchanged, with 50.8% upward space compared to the current stock price.
risks
New product launches, clinical trial data and sales fell short of expectations; competition intensified.