Finance Association, April 22 (Reporter Lu Afeng) This evening, Zhifei Biotech announced last year's earnings report and this year's Q1 report. The company's revenue increased by nearly 40% last year, but surprisingly, Zhifei Biotech's net profit last year did not soar as expected; it only achieved single-digit growth. Looking ahead to 2024, competitors such as Wantai Biotech are watching closely.

This evening, Zhifei Biotech released its 2023 report. During the reporting period, the company achieved revenue of 52,918 billion yuan, an increase of 38.30% over the same period last year. In 2024, Q1 achieved revenue of 11.395 billion yuan.

However, in mismatch with the sharp increase in revenue of nearly 40%, Zhifei Biotech achieved net profit to mother last year of only 8.070 billion yuan, an increase of 7.04% over the same period last year; it achieved net profit deducted of 7.915 billion yuan, an increase of 5.40% over the same period last year.

Furthermore, by comparing Zhifei Biotech's quarterly net profit performance, the Finance Association reporter also found that Zhifei Biotech's net profit in 2024Q1 and 2023Q4 also declined, decreasing by 28.26% and 20.3%, respectively.

Why is there a sharp increase in revenue, but the increase in net profit is not as good as expected?

According to public information, Zhifei Biotech was founded in 2002 and is an international, full-chain biotech enterprise integrating R&D, production, sales, promotion, distribution, import and export of vaccines and biological products. However, in reality, Zhifei Biotech is a vaccine company that relies heavily on proxy products. The company uniformly sells all imported vaccines marketed in mainland China, such as the quadrivalent HPV vaccine, the nine-valent HPV vaccine, the oral pentavalent recombinant rotavirus live vaccine (Vero cells), the 23-valent pneumococcal polysaccharide vaccine, and the hepatitis A inactivated vaccine (human diploid cells), etc.

Furthermore, in October 2023, the company reached a cooperation with GSK on the supply, distribution and joint promotion of the recombinant shingles vaccine developed and produced by GSK to exclusively represent this product.

According to financial reports, the revenue contribution of Zhifei Biotech's agent products reached 98.05% in 2023, and the revenue contribution of agents in 2022 was 91.40%, and the revenue contribution ratio of independent products declined further. The revenue contribution of biological products reached 99.99%, and the gross margin was 25.68%. The overall gross margin and gross margin of agent varieties declined year-on-year

Compared to several other domestic listed vaccine companies, in 2023, the gross sales margin of the vaccine business of Changchun Hi-Tech, Wantai Biotech, Kanghua Biotech, and Hualan Vaccine was no less than 80%.

Furthermore, since 2023 is a year to strengthen sales team building and increase marketing efforts, Zhifei Biotech's sales expenses reached 2,772 billion yuan last year, an increase of 24.04% over the previous year.

It is worth mentioning that Zhifei Biotech's nine-valent HPV vaccine, which will be sold in 2023, will probably welcome a strong competitor in 2024. On April 11, Wantai Biotech issued an announcement stating that the site work for the Phase III main clinical trial V8 of the nine-valent HPV vaccine has been completed, and specimen testing is ongoing. The industry generally predicts that Wantai Biotech's nine-valent HPV vaccine is expected to be approved for marketing in 2024 as soon as possible.

In terms of the 2024 business plan, Zhifei Biotech revealed that the quadrivalent influenza virus lysis vaccine that has already been reported for production is expected to be approved, the freeze-dried human rabies vaccine (MRC-5 cells) that have completed clinical trials is expected to enter the registration phase, and several pre-clinical projects with competitive potential are also expected to officially enter the clinical trial stage.