Incident Overview
The company released its annual report for 2023: Achieving operating income of 40.341 billion yuan, a year-on-year increase of 2.51%, a year-on-year increase of 9.607 billion yuan, a year-on-year increase of 9.00%, realized deducted non-net profit of 9.748 billion yuan, an increase of 16.81% year-on-year, and achieved profit attributable to holders of non-IFRS parent companies of 10.855 billion yuan, an increase of 15.5% year-on-year.
Analytical judgment:
The 23-year performance achieved steady growth, and the D&M business continued to contribute to the increase in performance
Revenue for the full year of '23 was 40.341 billion yuan, up 2.51% year on year, and 36.1% year on year after excluding COVID-19 commercialization projects. Of these, 23Q4 achieved revenue of 10.799 billion yuan in a single quarter, up -1.47% year on year, and 30.99% year on year after excluding COVID-19 commercialization projects, and the performance achieved steady growth. By business, drug discovery revenue YOY 5% +, D&M business revenue (excluding COVID-19 commercialization projects) revenue YOY +55%, testing business revenue YOY +5%, biology business revenue YOY +3%, CGT CDMO revenue YOY +0.1%, and DDSU revenue YOY -25%. Overall, the D&M business continues to contribute to increased performance. According to the company's 2023 performance presentation materials, the company gave 24-year revenue guidance, that is, 383 to 40.5 billion yuan, with a year-on-year increase of 2.7% to 8.6% after excluding COVID-19 commercialization projects, maintaining steady growth expectations. In addition, the company will continue to improve production and operation efficiency. After considering the rise in new production capacity and the impact of exchange rates, it is expected that 2024 will maintain an adjusted non-IFRS net interest rate level comparable to 2023, that is, maintain a high level of profitability.
Investment advice
Considering the subsequent impact of the global investment and financing boom and the potential impact of US related proposals on the company's business, adjust the 24-25 profit forecast, that is, 24-26 revenue was adjusted from 462.91/577.74/NA 100 million yuan to 392.70/453.12/53306 billion yuan, and EPS was adjusted from 3.56/3.85/NA yuan to 3.43/3.92/4.62 yuan, corresponding to the closing price of 47.46 yuan/share on March 26, 2024, PE was 14/12/10, respectively Double, maintaining a “buy” rating.
Risk warning
Risk of loss of core technical backbone and management, risk of increased competition, risk of failure in growth strategies and business expansion, risk of loss of core customers, risk of exchange rate fluctuations, risk of drug price reduction in the US market, potential risk of US related proposals, and risk of illegal shareholders' holdings reduction in 2021.