Incident: Gloria Incorporated publishes its 2024 quarterly report. In the first quarter of 2024, the company achieved revenue of 1,400 million yuan (-7.76% YoY), net profit attributable to mother of 282 million yuan (YoY -55.27%), and net profit not attributable to mother of 254 million yuan (-58.88% YoY).
Comment:
Regular business grew steadily, and the completion of large orders affected financial performance. Due to the completion of large orders, the 2024Q1 revenue and profit growth rate declined. After excluding the 2023Q1 big order revenue, 2024Q1's revenue increased 15.21% year-on-year, and the company's regular business continued to maintain a steady growth trend. In terms of profit margin, the company's 2024Q1 comprehensive gross profit margin was 43.52% (-4.88pp, month-on-month +5.49pp), the net profit margin was 20.14% (-7.88pp), and the net profit margin after deduction was 18.14% (-9.32pp). From a month-on-month perspective, the company's comprehensive gross margin increased significantly and profitability remained stable; in terms of expense ratios, the company's 2024Q1 expense ratio was 22.03% (+4.31pp), of which sales/management/ R&D/finance expenses ratios were 3.19% (+ 1.68pp)/12.33% (+4.96pp)/12.10% (+4.90pp)/-5.59% (-7.23pp). Exchange gains, losses, and interest income due to exchange rate fluctuations reduced the financial expense ratio year over year, and the cost rate increased year over year due to the completion of large orders.
The small-molecule CDMO business continues to improve, and the growth rate of emerging businesses has decreased due to environmental impacts.
2024Q1, the small molecule CDMO business achieved revenue of 1,223 billion yuan (-38.85% year over year), an increase of 26.58% year-on-year after excluding revenue from large 2023Q1 orders. Among them, 30 small molecule commercialization projects confirmed revenue and 148 small molecule clinical projects (41 phase III projects), continuing to maintain its business advantage. The emerging business achieved revenue of 176 million yuan (-29.30% YoY), mainly due to the impact of the domestic investment and financing environment.
Overseas markets are growing strongly, and overseas production capacity is being actively deployed to drive subsequent development. 2024Q1, after excluding the 2023Q1 large order revenue, customer revenue in the European and American markets increased 62.80% year on year, and overseas markets maintained strong growth. Due to the different industry environments and customer needs in different regions of the world, the company is speeding up the overseas production capacity layout, which is expected to lay a good foundation for subsequent order acquisition and revenue growth.
Profit forecast: We expect the company's revenue for 2024-2026 to be 63.29/78.07/9.817 billion yuan, up -19.1%/23.4%/25.7% year on year; net profit to mother will be 11.08/14.42/1,956 billion yuan respectively, up -51.2%/30.1%/35.7% year on year, corresponding to 2024-2026 PE 27/21/15 times, respectively.
Risk factors: Risks such as increased competition in the industry, declining demand for R&D investment and outsourcing, policy risks, and new business development falling short of expectations.