Introduction to this report:
High performance growth continues, profitability increases, CDMO, peptide APIs and formulations continue to be released, optimistic about long-term growth potential, and maintained an increase in holdings rating.
Key points of investment:
Maintain an increase in holdings rating. 2024Q1 had revenue of 356 million yuan (+71.02%), net profit of 66 million yuan (+215.65%); net profit without return to mother of 65 million yuan (+179.69%); the performance was in line with expectations, maintaining the 2024-2026 EPS forecast of 1.14/1.61/2.18, maintaining the target price of $64.40, maintaining an increase rating.
High performance growth continues, and profitability improved. 2024Q1's high performance continues. It is expected that the customized business will benefit from BD-side customers and project expansion, and the API and formulation side will benefit from the continued release of peptide raw drug types and oseltamivir phosphate capsules. Benefiting from the continued expansion of high-margin varieties, 2024Q1's gross margin increased to 67.26% (+11.33pct) and net margin increased to 18.15% (+9.07pct).
It is expected that the customized business and independent products will continue to expand. The proprietary product segment proliraglutide and simeglutide raw materials obtained FDA First AdequateLetter in October and December 2023, respectively, and can directly meet the ANDA reporting requirements of related formulation customers worldwide; formula-side injectable bivalirudine, amlodipine atorvastatin calcium tablets, and olmesartan ester amlodipine tablets (ninth batch collection) were approved in 2023. The customized business side signed a US$102 million cGMP advanced pharmaceutical intermediate contract with a large European pharmaceutical company in May 2023, signed a strategic cooperation agreement with European and Latin American customers for simeglutide APIs, and signed a CDMO cooperation agreement with a well-known domestic biomedical company for GLP-1 innovative pharmaceutical ingredients. Adequate orders guarantee growth.
Catalysts: Did order growth exceed expectations, peptide market growth exceeded expectations, clinical progress exceeded expectations? Risk warning: drug approval risk, product development risk, market competition risk, upstream raw material risk, exchange rate fluctuation risk