Tebao Biotech announced its 2023 annual report and 2024 quarterly report. The company achieved operating income of 210 billion yuan in 2023, +37.6% year on year; net profit to mother of 550 million yuan, +93.5% year on year; net profit after deducting non-return to mother of 580 million yuan, +73.6% year on year.
In the first quarter of 2024, the company achieved operating income of 550 million yuan, +30.1% year on month, -14.9% month on month; net profit to mother of 130 million yuan, +53.0% year on year, -30.9% month on month; net profit after deducting non-return to mother was 150 million yuan, +42.9% year over month, and -13.1% month on month.
Tebao BioPegbin continued to rapidly release to support performance growth. In the first quarter of 2024, sales expenses increased month-on-month and gradually returned to normal levels. By product, Tebao BioPegbin's sales revenue in 2023 was 1.79 billion yuan, +54% year-on-year, accounting for 85% of total revenue, which is the main driver of revenue growth. In the first quarter of 2024, Tebao Biotech's revenue increased by 30.1%. The main reason is also that with the continuous spread of clinical treatment concepts for hepatitis B and the accumulation of scientific evidence, Pegbin was further recognized by experts and patients, and the product continued to be released, leading to an increase in revenue. On the profit side, the company's net interest rate for the first quarter of 2024 was 23.6%, down 2.8 percentage points from the full year of 2023, and 5.5 percentage points lower than the fourth quarter of 2023. The main reason is that the company's sales expenses rate for the first quarter of 2024 was 44.4%, an increase of 4.0 percentage points over the full year of 2023, and an increase of 5.9 percentage points compared to the fourth quarter of 2023. Sales expenses gradually returned to normal levels as external influences gradually weakened.
The marketing application for clinical curative indications for chronic hepatitis B was accepted, and the rest of the research pipeline is progressing smoothly. In March 2024, the company announced that the marketing license application for pegubin combined with nucleoside (acid) analogs for clinical treatment of chronic hepatitis B in adults was accepted by the State Drug Administration, laying the foundation for further dosage of Pegobin. In addition, in terms of the research pipeline, the company's long-term growth hormone was accepted for drug registration in January 2024, long-term human erythropotropin completed phase II clinical research, human interferon α2b spray is undergoing phase I clinical research, and AK0706 is progressing smoothly.
Maintain a “Highly Recommended” investment rating. We are optimistic about the continuous release of Tebao Biopegin. At the same time, the increase in indications is expected to further open up long-term space and continue to advance in the superposition of the research pipeline. According to Pegbin's quantitative pace expectations, we expect net profit from 2024-2026 to be 740 million yuan, 950 million yuan, and 1.26 billion yuan, respectively, +32% compared to the same period last year. The corresponding PE is 36x, 28x, and 21x, respectively, maintaining a “highly recommended” investment rating.
Risk warning: risk of R&D falling short of expectations, risk of commercialization falling short of expectations, risk of increased competition, risk of product price changes, etc.