Introduction to this report:
The business is growing steadily, and the innovation pipeline is expected to be realized one after another. It is optimistic about long-term growth space and maintains the rating of increasing holdings.
Key points of investment:
Maintain an increase in holdings rating. 2024Q1 revenue of 10.411 billion yuan (+2.93%), net profit of 862 million yuan (+14.18%), net profit of non-return to mother of 838 million yuan (+10.66%); net profit of non-return to mother was 928 million yuan after deducting equity incentives and profit and loss effects of participating R&D institutions, etc., and the performance was in line with expectations; maintaining the 2024-2026 EPS forecast of 1.93/2.29/2.66 yuan.
The target price was maintained at 40.53 yuan, and the increase in holdings rating was maintained.
Steady growth in performance. Pharmaceutical industry revenue of 3.399 billion yuan (+10.53%), net profit of 751 million yuan (+11.67%); industrial microbiology increased 23% year over year; pharmaceutical commercial revenue of 6.717 billion yuan (-1.86%), mainly due to the high base impact of the same period in 2023, and is expected to resume growth in Q2; the medical and aesthetic sector maintained rapid growth, with revenue of 630 million yuan (+25.30%), of which Sinclair, a wholly-owned overseas subsidiary, had revenue of 272 million yuan (-4.40%), mainly due to the slowdown in global macroeconomic growth and Due to the impact of exhibition spending, the growth rate is expected to pick up in Q2. Domestic sales of Xinkley Aesthetics (core product, Girls' Acupuncture) were 257 million yuan (+22.65%), and volume growth continued.
The ongoing research pipeline is expected to be realized one after another. Liraglutide injection for diabetes and weight loss indications was approved for marketing for the first time in China in March and June 2023; BCMA CAR-T was approved for marketing by the NMPA in 2024. The world's first ADC drugs ELAHERE, ARCALYST, Xanapali capsules, and QX001S are expected to be approved within 2024; mehuatinib is expected to submit a marketing application for first-line EGFR sensitive mutations in 2024; and simeglutide injection has completed the enrollment of all subjects in phase III clinical studies. The product pipeline is expected to gradually materialize.
Catalysts: Clinical progress has accelerated, industrial and micro business development has exceeded expectations, and demand for medical and aesthetic products has exceeded expectations? Risk warning: Innovative drug development progress and commercialization fall short of expectations, industry rectification risks