Incidents:
On April 24, the company released its 2024 quarterly report: the company achieved revenue of 448 million yuan, a year-on-year decrease of 44.36%; realized net profit of 152 million yuan, a year-on-year decrease of 10.74%; realized net profit deducted from non-return to mother of 127 million yuan, a year-on-year decrease of 7.63%. The company's performance was in line with expectations, and the apparent decline in growth was mainly due to some business results.
Blood products are expected to maintain good growth, and the annual pulp collection volume is expected to further increase. The company will successively complete the publication of the Fuda distribution business and Tianan diabetes business in 2023H2, and calculate the impairment of the goodwill of Nanjing Xinbai at the end of 2023, further focusing on the development of the main blood products industry, and entering the market in 2024. Excluding the impact of the 23Q1 distribution business and diabetes business on the revenue and profit side, 2024Q1's blood products business is expected to achieve steady year-on-year growth. The company has one pulping station and two pulping stations certified in 2023. In 2024, the new pulping station is expected to gradually climb the slope and contribute a certain amount of pulp collection. With the continuous exploration of the pulping potential of the old pulp station and the incremental contribution of the new pulp station, the company's pulp collection volume is expected to achieve double-digit growth in 2024 based on 467 tons (+6.47%) in 2023, laying a good foundation for subsequent product-side releases. Currently, the company has 16 pulp stations. Empowered by China Resources Group, the company is expected to achieve a breakthrough in expanding its pulp station resources.
Excellent profitability, steady progress of products under development
The company's products cover three categories and 9 varieties. The product structure is balanced and the gross profit level is high. In 2023, the blood products business achieved revenue of 1,452 million yuan (+10.41%), with gross margin of 69.74% (-0.8pp), of which albumin, hydroxypropyl, fibrin and other blood products reached 438 million yuan (+4.26%), 445 million yuan (+15.55%), 419 million yuan (-3.20%), and 150 million yuan (+94.95%), respectively. The company has excellent academic promotion capabilities, continues to lead the market share of fiber fibers, and the new PCC and Eight Factors have achieved rapid release in the past three years. Among the varieties being developed, high-concentration isopropyl has completed a clinical summary report and is expected to be marketed next year; vascular hemophilia factors are in the clinical stage; C1 esterase inhibitors have been approved for clinical use.
Profit forecasts and investment suggestions:
We expect the company's 2024-2026 net profit to be 567/628/691 million yuan, respectively, the corresponding EPS is 1.12/1.25/1.37 yuan, and the PE corresponding to the current stock price is 27.71/25.02/22.73 times, respectively. The company is a high-quality enterprise in the blood products industry. The product structure is balanced, the profitability is excellent, and the net profit of tons of pulp continues to lead the industry. After China Resources Holdings, the company is expected to make a major breakthrough in pulp station resources with strong shareholder strength, enter a period of rapid development, and gradually enter the first tier of the domestic blood products industry. First coverage, giving a “buy” rating.
Risk warning:
The amount of pulp collected falls short of the expected risk; the risk of product sales falling short of the expected risk; the launch of a new product falls short of the expected risk.