Maintain an “Overweight” rating. 2024Q1's revenue was 3.243 billion yuan (-5.0%), net profit attributable to mother was 608 million yuan (+4.5%), net profit after deducting non-attributable net profit of 590 million yuan (+3.6%), and gross profit margin of 64.67% (+1.60pct). The results were in line with expectations. Maintain the 2024-2026 EPS forecast at 2.40/ 2.70/ 3.09 yuan. Refer to comparable companies. Considering the short-term pressure of iprazole, a certain valuation discount was given, PE19X was given in 2024, and the target price was raised to 45.60 yuan (+2.43 yuan), optimistic about the company's future innovation and transformation layout, and maintain the “gain” rating.
The price reduction of iprazole is under pressure in the short term, and I am optimistic that the Chinese medicine sector will grow throughout the year. ① The chemicals segment generated revenue of 1,586 billion yuan (-2.3%). Among them, digestive tract product revenue is 589 million yuan (-25.7%), and injections are expected to continue to improve throughout the year through price reductions. We expect tablets+injections to achieve single-digit growth; revenue from sex-stimulating hormone products is 807 million yuan (+39.9%), which represents a low base of leuprorelin and high delivery in a single quarter in 24Q1 during the same period in 23 years. We believe that subsequent national sales will absorb the low prices of Guangdong Joint Production, which is expected to achieve single-digit growth throughout the year; ② The revenue of APIs and intermediates is 955 million yuan (-3.9%), which is optimistic about improving the production process Brought Reduced costs and increased profits due to the release of high-end pet medicines and antibiotics in future high-margin products. ③ Revenue from traditional Chinese medicine formulations is 389 million yuan (-29.6%), which is a high base of anti-viral particles during the same period in '23. We believe that frequent influenza outbreaks in '23 led to a high overall base of antiviral particles, and there was pressure in 24. It is expected that Shenqi Fuzheng injections will be released further after cancelling tumor restrictions on the medical insurance catalogue. We expect the traditional Chinese medicine sector to achieve low double-digit growth throughout the year.
Innovative drugs and high-end complex formulations will be realized, driving the company's high-quality long-term development. ① Triptorelin microspheres are expected to be approved within 24 years to treat endometrial cancer. ② Aripiprazole microsphere 1M has submitted an NDA and is expected to be approved in 25Q1, then entered into medical insurance. It is expected that dosage will begin in '26. ③ Simeglutide diabetes indications are expected to be submitted for NDA in 24 years and are expected to be approved before the end of 25.
④ The recombinant human IL17A/F antibody head-to-head succuchiumab phase III enrollment continues to advance. It is expected that phase III data will be read out and NDA submitted at 25H1.
Catalysts: New product release climbs slope, excellent clinical results
Risk warning: changes in domestic pharmaceutical policies; clinical trial results fall short of expectations