Introduction to this report:
The company released its 2024 quarterly report. The performance exceeded expectations. The core products were rapidly released, and the cost reduction and efficiency effects were obvious. Revenue and profit are expected to grow steadily throughout the year; the research pipeline is progressing steadily, which is expected to contribute to performance growth in the future.
Key points of investment:
Maintain an “Overweight” rating. The company released its 2024 quarterly report, with revenue of 267 million yuan (+28.7%) and net profit to mother of 91 million yuan (+171.9%). The performance exceeded expectations. The high growth was mainly due to:
① Low base for the same period in 23Q1; ② Core product revenue increased rapidly; ③ Cost control capabilities improved, R&D investment reduced. Maintain the 2024-26 EPS forecast of 0.49/0.50/0.54 yuan. According to the DCF valuation method, a target price of 30.96 yuan was given, and the “increase” rating was maintained.
Exaipu grew significantly, and Ceptin and Guanippe continued to grow at a high rate. By product: (1) Yisaipu's revenue increased by 25.72%, despite maintaining high growth under the pressure of price cuts. It is expected to be mainly due to: ① the low base of 23Q1; ② the increase in sales volume after the expansion of procurement to make up for the impact of the price decline; ③ the launch of the new prefilled dosage form 23Q2 brought about a certain increase. (2) Septin's revenue is +60.14%, which is expected mainly due to ① the low base of 23Q1; ② the increase in market penetration rate. (3) Guanippe revenue +90.8%. The high growth was mainly due to the low base effect. It is expected that in 2024, Ceptin and Gennippe will continue to maintain a high growth rate. Despite price cuts, the penetration rate is expected to further increase and revenue is expected to remain stable. Combined with the recognition of corresponding authorized revenue for 24 years, revenue is expected to continue to grow steadily throughout the year.
Cost control has been improved, and profitability has been continuously optimized. 24Q1 continued to reduce costs and increase efficiency, and the cost rate declined significantly during the period. Among them: sales expenses ratio 19.3% (-6.5 pct), management expense ratio 6.3% (-0.6 pct); R&D expenses ratio 19.9% (-9.1pct), which is expected to increase R&D capitalization mainly due to the 24Q1 multi-pipeline entering Phase III; R&D investment is expected to remain at a high level throughout the year. The overall cost rate is expected to remain stable in the subsequent period.
The research pipeline is progressing steadily, and IL-17 is expected to submit an NDA within 2024. The four core products IL-17, IL-1β, IL-4R, and IL-5 are expected to successively submit their first indicative NDAs in 2024-27. The research pipeline is progressing steadily, and we look forward to commercialization of core products.
Risk warning: risk of R&D failure, risk of sales falling short of expectations, risk of deteriorating competitive landscape