Description of the event
The company disclosed its 2023 annual report. In 2023, the company achieved annual revenue of 40.624 billion yuan, an increase of 7.71% over the previous year, and achieved net profit attributable to shareholders of listed companies of 2,839 billion yuan, an increase of 13.59% over the previous year. The company achieved operating income of 10.229 billion yuan in the fourth quarter of 2023, an increase of 3.79% over the previous year, and achieved net profit attributable to shareholders of listed companies of 650 million yuan, an increase of 25.51% over the previous year. It is proposed to distribute a cash dividend of 5.8 yuan (tax included) for every 10 shares to all shareholders.
Incident comments
In 2023, the company's medical and aesthetic business grew rapidly, and the pharmaceutical industry grew steadily. In terms of revenue side business, the company's pharmaceutical industry achieved a 9.45% year-on-year increase in sales revenue in 2023; the company's industrial microbiology sector achieved total sales revenue of 525 million yuan, up 20.67% year on year after excluding specific product business; the company's pharmaceutical business achieved operating income of 26.981 billion yuan, an increase of 5.59% year on year; in addition, the medical and aesthetic sector continued to maintain rapid growth, achieving a total revenue of 2,447 billion yuan (excluding internal offsetting factors), with a year-on-year increase of 27.79%. The focus is on the pharmaceutical industry and the medical and aesthetic business:
Pharmaceutical industry: Steady growth throughout the year, and continued to maintain high R&D investment. The company's core subsidiary in the pharmaceutical industry continued to maintain a steady growth trend, achieving annual sales revenue of 12.217 billion yuan, an increase of 9.45% over the previous year, and net profit to mother of 2,330 billion yuan, an increase of 9.63% over the previous year. The company's investment in R&D in the pharmaceutical industry continued to increase. During the reporting period, the company's pharmaceutical industry R&D investment (excluding equity investment) was 2,293 billion yuan, an increase of 23.67% over the previous year. As of the disclosure date of the annual report, the company's innovative product pipeline had exceeded 60 items, 9 of which were in the phase III clinical or marketing application stage, forming a good development trend of continuous clinical promotion and marketing of innovative products, providing new momentum for medium- to long-term development.
Medical and aesthetic business: In 2023, the profitability of the company's overseas medical and aesthetic business increased, and the influence of Yi Yanshi's products was further enhanced in domestic medicine and beauty. For the full year of 2023, the medical and aesthetic business achieved a total revenue of 2,447 billion yuan (excluding internal offsetting factors), an increase of 27.79% over the previous year. The overall profitability of the medical and aesthetic sector and its contribution to the company's overall net profit increased steadily. Overseas, as the company's global medical and aesthetic business operation platform, the wholly-owned subsidiary Sinclair in the UK overcame the weak impact of global economic growth and actively expanded the global market sales of its medical and aesthetic injection fillers and energy source equipment products, achieving sales revenue of about 1,304 billion yuan, an increase of 14.49% year on year, the first annual profit since the company's acquisition; domestically, the wholly-owned domestic medical and aesthetic subsidiary Xinclair achieved cumulative revenue of 1,051 million yuan, an increase of 67.83% year on year. Ellansé? Lee Yeon-si? The number of official partner hospitals has exceeded 600, the number of trained and certified doctors has exceeded 1,100, and the influence of the product continues to increase.
Investment advice: In terms of medical and aesthetic business, current optical radiofrequency therapy devices V20, MaiLi Extreme, MaiLi Precise, and Ellansé? Lee Yeon-si? The clinical and registration of products such as type M is continuing to advance in China, and the company's domestic medical and aesthetic business pipeline is rich, and it is worth looking forward to continued growth. In terms of the pharmaceutical business, the company approved for marketing in 2023 liraglutide injections (trade name: Lilupin?) This is an important result of the company's continued investment in product innovation. It is the first liraglutide biosimilar approved for marketing in China. The sales momentum is good, and it is expected to lay a solid foundation for subsequent commercialization of GLP-1 products. EPS is expected to be 1.95, 2.26, and 2.50 yuan respectively in 2024-2026, maintaining a “buy” rating.
Risk warning
1. Industry policies and market operation risks;
2. The risk of uncertainty in the development of new drugs;
3. Investment merger and acquisition risk.