The company disclosed its full-year results for 2023: the company achieved revenue of 31.45 billion yuan (+1.7%, the following are year-on-year ratios), net profit to mother of 5.883 billion yuan (-3.6%), and net cash flow from operating activities of 4.179 billion yuan (-45.2%). The company's various business segments, proprietary pharmaceuticals business, raw materials products business, functional food and other businesses achieved revenue of 25.637 billion yuan (+4.6%), 3.641 billion yuan (-9.7%), and 2.172 billion yuan (-8.9%) in 2023, respectively.
Deeply involved in the six major treatment fields of the proprietary medicine business, and innovative products drive steady growth in performance. The rapid release of new products such as Doenyi, Doenda, and Amfulic promoted the steady growth of the company's proprietary pharmaceutical business. The proprietary pharmaceutical business achieved revenue of 90.89 (+12.1%), 61.39 (-16.4%), 42.36 (+19.7%), 24.40 (-15.5%), 15.60 (+124.0%), 8.89 (+17.8%), and 12.49 (+24.1%) yuan in the various treatment fields of the proprietary pharmaceutical business.
Research and development capabilities have been continuously strengthened, and innovation and internationalization have been realized one after another. (1) The company continues to increase investment in R&D and has built eight innovative R&D platforms, including nanoparticles, small nucleic acids, and ADCs. The R&D cost in 23 years reached 4.830 billion yuan (+21.2%). (2) According to the company's annual results announcement, the company currently has more than 60 key research pipelines in the clinical stage. Of these, 7 are in the marketing application stage and 18 are in the registered clinical stage. (3) The company actively strengthens business development, cooperates with high-quality Biotech to strengthen product pipelines, and promotes internationalization through external licensing of innovative products.
Profit forecasting and investment advice. We expect the company's 24-26 EPS to be 0.55 yuan/share, 0.61 yuan/share, and 0.68 yuan/share, respectively. Referring to the 24-year average 17 times PE valuation, the company was given a 24-year PE valuation of 17 times, with a corresponding reasonable value of about HK$10.18 per share, maintaining a “buy” rating.
Risk warning. There is a risk of failure in the development of new drugs. Clinical research progress falls short of expectations, registration approval progress falls short of expectations, and commercialization falls short of expectations.