The company released the 2023 annual report and the 2024 quarterly report: in 2023, the company achieved revenue of $52,918 billion (+38.30%, the following are year-on-year caliber), net profit of 8.070 billion yuan (+7.04%), net profit after deducting non-return to mother of 7.915 billion yuan (+5.40%); 2024Q1 achieved revenue of 11.396 billion yuan (+2.00%), net profit to mother of 1,458 billion yuan (-28.26%), net profit without return to mother.

The 9-valent HPV vaccine continues to be released, and the recombinant shingles vaccine acting as GSK is expected to increase performance. By business type, the company's independent products achieved revenue of 1,028 billion yuan (-68.70%) in 2023. The revenue side decline was mainly affected by changes in the COVID-19 vaccine market environment, and regular business growth was strong; proxy products achieved revenue of 51.885 billion yuan (+48.35%), and the 2023 quadrivalent and 9-valent HPV vaccines achieved batches of 10.34 million units (-26.27%) and 36.55 million units (+136.16%), respectively.

The company joined forces with MSD to renew the contract agreement from the second half of 2023 to 2026, with a cumulative purchase amount exceeding 100 billion yuan. Meanwhile, in October 2023, the company reached a cooperation with GSK to act as an agent for the recombinant shingles vaccine and has priority options for the RSV vaccine.

Continue to increase investment in research and development, and independent products have entered the harvest period. The company continues to increase R&D capital investment, investing 1,345 billion yuan (+20.82%) in R&D in 2023. As of the disclosure date of the 2023 annual report, the company's various self-developed product bureaus have been active in research and development: the 23-valent pneumococcal polysaccharide vaccine has been approved for marketing, the 15-valent pneumococcal conjugate vaccine is in phase III clinical trials, and the clinical application for the 26-valent pneumococcal conjugate vaccine has been accepted; the recombinant group B meningococcal vaccine has entered phase I clinical trials; and the component 100 white vaccine has entered phase III clinical trials.

Profit forecasting and investment advice. We expect the company's net profit to be 105.27, 126.57, and 14.746 billion yuan respectively in 2024-2026, giving the company 15 times PE in 2024, corresponding to a reasonable value of 65.96 yuan/share for the company, giving it a “buy” rating.

Risk warning. Sales of the HPV vaccine fell short of expectations; the pace of batch issuance of the recombinant shingles vaccine fell short of expectations; the supply volume of MSD and GSK products fell short of expectations; and development progress fell short of expectations.