Incident Overview
The company announced its 2023 annual report: 23 The full year achieved operating income of 5.523 billion yuan, a year-on-year increase of 1.44%, and realized net profit of 1,033 billion yuan, an increase of 12.17% over the previous year, and realized deducted non-net profit of 1,024 billion yuan, an increase of 10.46% over the previous year.
Analytical judgment:
Performance showed steady growth, and the API business was under pressure
The company achieved revenue of 5,523 billion yuan in 23 years, up 1.44% year on year. Among them, the CDMO business achieved revenue of 4,079 billion yuan, up 19.4% year on year, showing steady and rapid growth. The specialty APIs and intermediates business achieved revenue of 1,261 billion yuan, down 22.9% year on year. Among them, anti-infective products fell 43.67% year on year. We judge that it was mainly affected by increased competition in the global API industry.
(1) The CDMO business showed steady and rapid growth: in '23, the CDMO business achieved revenue of 4,079 billion yuan, an increase of 19.4% over the previous year, and its gross margin was 40.34%, an increase of 0.65 pct over the previous year. By the end of '23, the company had served 32 commercialization projects, 74 phase III projects, and 902 clinical phase I/II projects, and continued to show an upward trend compared to the project situation at the end of '22. In '23, the company completed the main construction of the Ruibo Taizhou (Phase I) production workshop and supporting facilities and entered the equipment installation stage. Some production lines are expected to be put into use in 24Q2, enhancing the certainty of the company's future performance growth.
(2) Specialty APIs and intermediates are under pressure: the specialty APIs and intermediates business achieved revenue of 1,261 billion yuan, a year-on-year decrease of 22.9%. Among them, anti-infective drugs achieved revenue of 332 million yuan, a year-on-year decrease of 43.67%, central nervous system drugs achieved revenue of 464 million yuan, a year-on-year decrease of 17.25%, non-steroidal drugs achieved revenue of 304 million yuan, a year-on-year increase of 5.49%, and hypoglycemic drugs achieved revenue of 160 million yuan, a year-on-year decrease of 18.59%.
Investment advice
Considering that both the specialty APIs and intermediates business and the CDMO business are under certain pressure, the 24-25 performance expectations were lowered, that is, 24-26 revenue was adjusted from 68.66/81.10/NA 100 million yuan to 62.42/72.38/7.251 billion yuan, and EPS was adjusted from 1.74/2.19/NA yuan to 1.32/1.54/1.53 yuan, corresponding to the closing price of 17.06 yuan/share on April 8, 2024, PE was 13/11/11 times, respectively, maintaining the “buy” rating .
Risk warning
Risk of loss of core technical backbone and management, risk of increased competition, risk of loss of core technical personnel, risk of exchange rate fluctuations, risk of product development progress falling short of expectations and failure