occurrences

Jichuan Pharmaceutical Co., Ltd. announced that in 2023, the company achieved operating income of 9.655 billion yuan, an increase of 7.32%; net profit attributable to owners of the parent company was 2,823 billion yuan, an increase of 30.04% year on year; net profit attributable to owners of the parent company after deducting non-recurring profit and loss was 2,692 billion yuan, an increase of 32.72% year on year.

Key points of investment

Core varieties continue to gain strength

In 2023, the sales expense ratio was 41.5%, down 4.22 percentage points from the previous year, and the sales expense ratio decreased significantly. On a quarterly basis, Q4 revenue in 2023 was 3.118 billion yuan, up 0.49% year on year, up 63.42% month on month; net profit to mother reached 889 million yuan, up 51.84% year on year, up 45.39% month on month, with significant marginal recovery. The company's revenue in 2023 significantly exceeded expectations, mainly due to increased market demand for the company's main varieties, Pu Di Lan anti-inflammatory oral liquid and children's tempura granules. In the first half of 2023, Pudilan anti-inflammatory oral solution accounted for 12.10% of the proprietary Chinese medicine market for fever clean-up and detoxification drugs in urban public hospitals, ranking 2nd; in the first half of 2023, pediatric tempeh clean-up tablets accounted for 46.52% of the proprietary Chinese medicine market for pediatric colds in public hospitals, ranking 1st.

Promote BD projects around areas of sales advantage

In 2023, the company obtained exclusive promotion rights for Zhengxiang Pharmaceutical's ZX-7101A oral formulation in mainland China and an introduction or cooperation agreement for 1 TCM targeted dialysis treatment device and 2 medical device products for gynecology and ophthalmology, respectively, to achieve the company's 2022 performance assessment goals. Among them, ZX-7101A is a PA inhibitor for treating or preventing influenza. It efficiently inhibits influenza A and B viruses, including the highly lethal avian influenza virus. The marketing application was accepted by the CDE on February 8, 2024.

Steadily promote research and development of new drugs

In 2023, the company obtained 4 drug registration certificates for concentrated sodium valproate solution, azithromycin dry suspension, pregabalin oral solution, tomoxetine hydrochloride oral solution, esprolol hydrochloride injection, ibuprofen suspension, and pediatric tempeh clean-up syrup, and entered 6 pre-BE or BE projects.

Profit forecasting

It is predicted that the company's revenue for 2024-2026 will be 101.09, 109.55, and 11.811 billion yuan, respectively, and net profit to mother will be 30.51, 34.15, and 38.08 billion yuan respectively, and EPS will be 3.31, 3.71, and 4.13 yuan respectively. The current stock price corresponds to PE 12.2, 10.9, and 9.7 times, respectively. The company's marketing advantages are obvious. It is optimistic about the company's long-term development, coverage for the first time, and gives a “buy” investment rating.

Risk warning

The progress of the BD project fell short of expectations, the price reduction in collection exceeded expectations, the listing progress fell short of expectations, and sales fell short of expectations, etc.