Sales of the core product Pegbin increased 54% year over year. In 2023, the company achieved revenue of 210 billion yuan (+37.6% YoY), net profit attributable to mother of 555 million yuan (+93.5% YoY), after deducting non-net profit of 579 million yuan (+73.6% YoY). By product, the core product Pegbin achieved sales of 1,790 billion yuan (+54.2% year over year), accounting for ~ 85% of the company's performance growth, with a gross profit margin of 95.52% (+6.0pp year over year). Mainly due to reduced patent royalties, Pegbin's gross margin improved dramatically; Terzin, Telcon, and Terli achieved revenue of 1.60/0.87/0.46 billion yuan (-16.2%/-12.0%/-31.4%, respectively), with sales volume of 916.57/183.99/ 1,534,700 units (+4.7% +4.7%/-26.5%, respectively); YPEG-G-CSF (YPEG-CSF) was approved for listing on June 30, 2023. 2024 is the first complete sales year, which is expected to contribute to sales growth.
The company focuses on recombinant proteins and long-lasting modified drugs. Established in 1996, Tebao Biotech is an innovative biomedical enterprise mainly engaged in R&D, production and sales of recombinant proteins and long-term modifying drugs. The company uses immune-related cytokine drugs as its main research direction to provide solutions for the treatment of major diseases such as viral hepatitis and malignant tumors.
The core product Pegbin is currently the only long-acting interferon product in the domestic market. Pegbin is the world's first 40kD polyethylene glycol interferon alpha-2b injection, which was approved for marketing in China in 2016. Based on the dual effects of inhibiting viral replication and enhancing immunity, Pegobin was approved as an indication for chronic hepatitis B/C (180 μg dose qWx48); in March 2024, an application for additional combined nucleoside (acid) analogs for clinical treatment of chronic hepatitis B in adults was accepted. A total of 3 long-acting interferon products have been approved for marketing in China. Among them, Merck/Scherling Baoya's Peloxin (discontinued in February 2016) and Roche's Pyroxine (domestic partner Geli Pharmaceuticals stopped providing promotional services at the end of 2022, Roche will no longer seek other partners and will not continue commercial promotion of Paroxin domestically) have withdrawn from the Chinese market. In the short term, the company Pegbin is the only long-acting interferon product in the domestic market.
Investment suggestions: The company's core product, Pegbin, is currently the only long-term interferon product in China. The domestic population of chronic hepatitis B patients is huge. With the continuous spread of clinical treatment concepts for hepatitis B and the accumulation of scientific evidence, the penetration rate of combination therapy based on long-term interferon is expected to continue to increase; Pekin is a new generation of long-term whitening drugs, which is expected to contribute to sales growth; long-term growth hormone has been submitted to the NDA, leading domestic progress. It is estimated that in 2024-2026, the company's revenue will be 28.09/36.72/4.699 billion yuan, respectively, and net profit to mother will be 7.50/10.70/1,477 billion yuan, respectively. Combining the relative valuation method and the absolute valuation method, it is determined that the company's price range is 70.27 to 73.37 yuan, with room for an increase of 7% to 12% compared to the current stock price. Covered for the first time, a “gain” rating was given.
Risk warning: risk of valuation, risk of profit forecasting, risk of failure in product development under development, risk of product commercialization falling short of expectations, etc.