盈利水平承压明显，主要受产品结构和中药材价格上涨等因素影响。23 年和24Q1 扣非归母净利率分别为12.26%/11.59%，同比下滑6.28/18.34pct。23 年毛利率为57.28%，同比-6.49pct；分产品看，心脑血管类/呼吸系统类/其他专利产品/其他类的毛利率分别为58.36%/69.19%/59.83%/32.96%，同比-6.53/-0.65/+2.25/+8.83pct。23 年销售/管理/研发费用率分别为26.21%/5.74%/8.27%，同比+0.21/+0.85/+0.03pct。24Q1 毛利率为51.48%，同比-13.49pct；销售/管理/研发费用率分别为22.51%/5.48%/7.16%，同比+3.91/+1.22/+2.97pct。Key points of investment
Incident: Eling Pharmaceutical released its 2023 annual report and 2024 quarterly report. In 23, it achieved revenue of 10.318 billion yuan (YoY -17.67%, adjusted compared to 2022), net profit attributable to mother of 1,352 billion yuan (YoY -42.76%, adjusted for 2022), net profit excluding non-return to mother of 1,265 billion yuan (-45.58% YoY, adjusted for 2022); of these, 23Q4 achieved revenue of 1,744 billion yuan (-61.99% YoY), net profit to mother of 406 million yuan, deducted Net profit not attributable to mother - $375 million. 24Q1 achieved revenue of 2,523 billion yuan (-35.89% YoY), net profit attributable to mother of 304 million yuan (YoY -74.73%), and net profit of 292 million yuan (YoY -75.18%) after deducting non-return to mother; performance was in line with expectations.
Operating performance is under slight pressure, mainly due to factors such as respiratory products being affected by factors such as lower market demand due to high base figures and high social inventories in the same period last year. By product, cardiovascular, respiratory, and other patented products/other categories achieved revenue of 47.09/33.05/4.35/1,869 billion yuan respectively in 23 years, +12.71%/-51.90%/+13.82%/+69.72% over the same period last year.
The profit level is clearly under pressure, mainly affected by factors such as product structure and rising prices of Chinese herbal medicines. Net interest rates after deducting non-return to mother in '23 and 24Q1 were 12.26%/11.59%, respectively, down 6.28/18.34pct from year to year. The gross margin for 23 years was 57.28%, -6.49pct; by product, the gross margin for cardiovascular, respiratory, other patented products, and other categories was 58.36%/69.19%/59.83%/32.96%, respectively, -6.53/-0.65/2.25/+8.83pct. Sales/management/R&D expense rates for 23 years were 26.21%/5.74%/8.27%, respectively, +0.21/+0.85/+0.03pct. 24Q1 gross margin was 51.48%, -13.49pct; sales/management/R&D expense ratios were 22.51%/5.48%/7.16%, respectively, +3.91/+1.22/+2.97pct.
Decrease in cash payments. The number of accounts receivable turnover days in '23 and 24Q1 was 72.01/88.56 days, respectively, up 24.08/46.64 days; the amount of cash/operating income received from 24Q1 sales and services was 76.78%, and net cash flow from operating activities was -70.77% year-on-year, mainly due to a decrease in sales repayments compared to the same period. The company's weighted average ROE in '23 was 12.16%, -11.46pct year-on-year.
Research and development of traditional Chinese medicine is progressing smoothly. Tongluo Mingmu capsules for the treatment of diabetic retinopathy have been approved for marketing. Astragalus anti-nasal tablets for the treatment of persistent allergic rhinitis have been declared for production, and Chaihuangli capsules for the treatment of chronic cholecystitis have completed phase III clinical trials; Lianhua Qinggang granules for children with colds and Luopotong tablets for the treatment of rheumatoid arthritis are undergoing phase III clinical research.
Give it an “gain” rating. We expect 2024-2026 net profit of 15.04/18.06 billion yuan, up 11.20%/20.08%/20.01% year-on-year, and EPS of 0.90/1.08/1.30 yuan, corresponding to PE21.75x/18.11x/15.09x. Considering the company's unique patented new drug development and academic marketing promotion model under the guidance of the complicated disease theory, it was given an “increase in weight” rating.
Risk warning: policy adjustment risk, cost fluctuation risk, R&D innovation risk
