Introduction to this report:
The company's performance was in line with expectations and showed a steady growth trend. Operational efficiency has improved, and the impact of collection has gradually been clarified. R&D investment has increased, and new products have entered the release cycle. Maintain an “Overweight” rating.
Key points of investment:
Maintain an “Overweight” rating. Maintain the 24-26 EPS forecast of 1.28/1.58/1.87 yuan, and maintain the target price of 29.53 yuan (corresponding to 2024 PE 23X). Maintain an “Overweight” rating.
The performance was in line with expectations and showed a steady growth trend. In 2024Q1, the company achieved operating income, net profit attributable to mother, net profit excluding net profit of 1,358 million yuan, 265 million yuan, and 267 million yuan, with a steady growth trend of +15.16%, +16.64%, and +16.62% over the same period last year.
Operational efficiency has improved, and the impact of collection has gradually been clarified. 2024Q1's sales expense ratio, management expense ratio, and financial expense ratio were 32.19%, 3.49%, and -0.47%, respectively. All expenses ushered in a certain degree of optimization, and operational efficiency continued to improve; gross profit margin and net profit margin were 70.78% and 19.54%, respectively, -2.55 pct and +0.25pct. The decline in the company's gross margin in 2023 was mainly due to a decrease in the price of collection and transmission. We judge The reason for 2024Q1's year-over-year decline is the same. As the stock of psychotropic and neurological products “should be exhausted” and the proportion of anesthetic products continues to increase, we expect the marginal impact of collection to gradually clear up, and the optimization of costs during the period is expected to lead to a continuous improvement in operational efficiency.
R&D investment has increased, and new products have entered the release cycle. 2024Q1 spent 143 million yuan on R&D, +30.77% year-on-year. R&D investment increased significantly, accounting for 10.56% of revenue.
R&D pipelines such as NH600001 are progressing steadily; Oselli fumarate is scheduled to be approved for listing in April '23 and officially included in the national health insurance catalogue in January '24, ushering in the new product release cycle; in February '24, the company and TEVA reached a cooperation agreement, which is expected to complete a total sales revenue of 2 to 2.5 billion yuan in 2024-2028, further contributing to the increase in performance.
Risk warning: risk of uncertainty in drug development; risk of policy changes.