Incidents:
On April 16, 2024, Tasly released its 2023 annual report: in 2023, the company achieved revenue of 8.674 billion yuan, an increase of 0.42% over the previous year; realized net profit of 1,071 billion yuan, an increase of 505.34% over the previous year; realized net profit without return to mother of 1,181 billion yuan, an increase of 60.11% over the previous year.
Investment highlights:
Modern traditional Chinese medicine lays out a variety of products to stabilize its leading position in traditional Chinese medicine. In accordance with international innovation standards and modern medical standards, the company has used compound salvia tablets to drive a series of leading brand products such as serum nourishing brain pellets (pills), astragalus medicine pills, injectable yiqi complex, and salvia polyphenolic acid for injections, and has built a modern traditional Chinese medicine system focusing on cardiovascular and cerebrovascular use. In addition, the company's cardiovascular research pipeline covers indications such as hyperlipidemia, antithrombotic stroke, stroke sequelae, heart failure, coronary heart disease, etc., forming a complete product chain with a complete range of products throughout the prevention, treatment and rehabilitation of cardiovascular and cerebrovascular diseases, maintaining a leading edge in the field of innovative cardiovascular and cerebrovascular drugs. In 2023, the company's innovative traditional Chinese medicine research and development and secondary development of key varieties progressed rapidly. Nineteen modern traditional Chinese medicine research products in the pipeline are in clinical phase II and III research stages.
The R&D and production lines are abundant, and the ability to innovate is constantly being strengthened. In 2023, the company continued to increase its R&D and innovation efforts to accelerate the R&D process of digital traditional Chinese medicine. It invested 1,315 billion yuan in R&D throughout the year, an increase of 29.49% over the previous year. The company's R&D pipeline is progressing efficiently. Through the “four in one” R&D model, it has a R&D pipeline covering 98 products under development, including 41 Class 1 innovative drugs, 36 of which are in clinical trials, and 26 are in clinical phase II and phase III: 2 classic Chinese medicines, loquat lung cleansing drink and Wen Jing Tang, have submitted production applications; 9 innovative traditional Chinese medicines are in phase III clinical research.
Profit forecast and investment rating: Considering the risk of collection price reduction that the company's business may face, which may have an impact on the company's operations, we adjust the company's profit expectations. We expect the company's revenue in 2024-2026 to be 91.81, 96.24, 10.010 billion yuan, net profit to mother of 11.34, 12.14, and 1,284 billion yuan, and corresponding PE of 20.20x, 18.87x, and 17.84x. As the company continues to focus on its core business, its innovative strength is gradually strengthened, its product coverage is gradually comprehensive, the drive for endogenous growth is continuously strengthened, and the “buy” rating is maintained.
Risk warning. There is a risk of price reduction in collection, the release of new products falling short of expectations, R&D progress falling short of expectations, sales falling short of expectations in the European and American markets, and the risk of changes in industry policies.