Brief performance review
On April 22, 2024, the company announced that revenue for the full year of 2023 was 435 million yuan, up 9.93% year on year, and the net profit attributes/deducted from mother was 0.7/60 million yuan, up 9.08%/6.38% year on year. Revenue for the first quarter of 2024 was 104 million, up 27.65% year on year, and attributable to mother/deducted non-net profit of 0.16.015 million yuan, up 17.38%/136.17% year on year. The performance was in line with expectations.
reviews
The comprehensive peptide layout consolidates the first-mover advantage, and the results in the three major fields of peptides are gradually being enriched.
(1) The scale of the global peptide market is growing rapidly. According to the company's annual report, the peptide market is expected to reach 79.5 billion US dollars in 2023, and the expansion of the peptide market will continue to drive demand for APIs and CDMOs. However, in recent years, China's peptide market has great potential for development. As of the end of 2023, China's NMPA approved a total of 80 peptide drugs for marketing, accounting for 43% of the number of peptide drugs approved for marketing in the world. The company's comprehensive and integrated layout in the field of peptides will consolidate its first-mover advantage. (2) In the field of peptide CDMO, as of the end of last year, the company had provided pharmaceutical CDMO services for new drug research and development companies and research institutions for more than 40 projects, including 1 commercialization stage, 2 declared production stages, and 19 clinical trial stage varieties.
(3) In the field of APIs and formulations, by the end of 2023, the company had 17 types of polypeptide raw materials developed independently. Companies in domestic and foreign markets have obtained production approvals or activation records for 13 and 9 types of peptide APIs, respectively. Among them, liraglutide has obtained US DMF registration. In addition, simeglutide APIs have been registered with the US FDA, and linaclotide APIs have completed US FDA registration. The company has a variety of peptide formulation products, including the company's first visit in China, enfuvirtide and cabecitracin injections.
Production capacity expansion is accelerating, and R&D investment is increasing. (1) The company accelerates the construction progress of production expansion and capacity expansion.
By the end of last year, the main construction of the company's new peptide formulation production line had been completed; the main construction of the “395 kg per year production line project” had also been completed; the construction of the new 106, 107, and 108 API workshops was progressing in an orderly manner. Furthermore, the company had gone through 37 audits and inspections last year, with a pass rate of 100%. (2) In 2023, the company's R&D expenditure was 34.78 million yuan, up 35.28% year on year. R&D investment accounted for 8 percent of revenue, up 1.5% year on year. Continued growth in R&D expenditure helped the company achieve long-term development.
Profit Forecasts, Valuations, and Ratings
Based on the quarterly growth of the company's performance, we raised our profit forecast to increase the company's 2024/25 revenue by 12%/34% to $539/687 million yuan, and increase net profit by 69%/92% to 120,000,000 yuan; the company's 2026 revenue/net profit to mother is 8.5/186 million yuan; and the company's net profit to the mother is estimated to be 1.2/1.5/186 million yuan in 2024/25/26, up 70%/25%/24% year on year. Maintain an “Overweight” rating.
Risk warning
Risks such as overseas approvals falling short of expectations, increased market competition, and fluctuating orders from overseas customers.