Event: The company publishes the 2023 Annual Report and the First Quarter 2024 Report.
In 2023, the company achieved operating income of 22.82 billion yuan, an increase of 7.26% over the previous year; achieved net profit of 4.302 billion yuan, an increase of 10.14% over the previous year; realized net profit of 4.141 billion yuan after deduction, an increase of 21.46% over the previous year. 2024Q1 achieved operating income of 5.998 billion yuan, an increase of 9.20% year on year; realized net profit of 1,369 billion yuan, an increase of 10.48% year on year; realized net profit after deduction of 1,440 billion yuan, an increase of 18.06% year on year.
Innovative drugs continue to contribute to increased performance, and several new products are expected to be approved for launch in 2024. In 2023, the company's innovative drug revenue reached 10.637 billion yuan (tax included, not including foreign licensing revenue), an increase of 22.1% over the previous year. At present, the company has approved 15 new Class 1 drugs. In addition, 8 products, including PCSK9 monoclonal antibody SHR-1209, JAK1 inhibitor SHR0302, IL-17A monoclonal antibody SHR-1314, NOV03 eye drops SHR8058, ciclosporin eye drops SHR8028, MOR inhibitor 8554, famitinib, and HR20013, have all been declared SHRNDA in 2023; referring to the approval time of other innovative drugs, we think the above products It is expected to be approved for listing in 2024. It is expected that the above new products will further strengthen the revenue contribution of the innovative drug business after approval for marketing.
The ADC pipeline has entered the stage of intensive data disclosure, and the self-exempt layout is about to be commercialized. In terms of the ADC pipeline, the company has now entered the clinical stage with 6 novel ADC drugs targeting HER2, TROP2, Claudin18.2, CD79b, HER3, and Nectin4. Among them, HER2 ADC and HER3 ADC have disclosed clinical data in 2023. Referring to the ADC clinical progress mentioned above, it is expected that the ADC is also expected to disclose the latest clinical data in 2024; in addition, the company also disclosed TF ADC and LIV-1 at the AACR 2024 conference Preclinical data from various new ADCs such as ADC, PSMA ADC, DLL3 ADC, and HER2 ADC. Overall, the company's many ADC drugs have entered the data intensive disclosure stage, and future overseas licensing is worth looking forward to. In terms of self-exemption pipelines, the JAK1 inhibitor SHR0302 and the IL-17A monoclonal antibody SHR-1314 are all expected to be approved for marketing in 2024, and the company's self-exempt layout is about to be commercialized.
Investment advice: We expect the company's revenue growth rates from 2024 to 2026 to be 15.2%, 14.8%, and 15.9%, respectively, with net profit growth rates of 28.4%, 18.3%, and 20.1% respectively, corresponding EPS of 0.87 yuan, 1.02 yuan, and 1.23 yuan, respectively, corresponding PE 48.9 times, 41.3 times, and 34.4 times, respectively; give the company a valuation level of 60 times PE in 2024, corresponding to a 6-month target price of 51.96 yuan/share, maintaining an investment rating of 51.96 yuan/share.
Risk warning: risk of clinical trial failure, risk of pharmaceutical policy changes, risk of product sales falling short of expectations.