Core views
In 2023, the company achieved revenue of 1,199 billion yuan, a year-on-year increase of 3.07%, net profit of 81 million yuan, a year-on-year increase of 15.56%, and plans to distribute a cash dividend of 1.00 yuan (tax included) to all shareholders; the 24Q1 company achieved revenue of 287 million yuan, an increase of 23.32% year on year, and net profit to mother of 127.229 million yuan, an increase of 20.45% year on year. By product, in 2023, the company's enzyme preparations achieved revenue of 441 million yuan (YoY +4.69%), microecological formulations achieved revenue of 237 million yuan (YoY -5.56%), animal health products revenue of 297 million yuan (YoY -0.62%); 24Q1 Enzyme achieved revenue of 111 million yuan (+34.69% YoY), and microecological formulations achieved revenue of 444.429 million yuan (YoY -7.99%).
In terms of profit margin, the 24Q1 company's gross sales margin was 44.46% (+0.65pcts year over year), and the net sales margin was 5.98% (+0.59pcts year over year). At present, the company's systematic production capacity layout in various sectors has basically been completed, and the continuous improvement of the animal health system is expected to improve customer stickiness and market competitiveness. At the same time, the company continues to develop in-depth cooperation with leading international companies, which is expected to improve the company's performance.
occurrences
The company disclosed the 2023 annual report and the 2024 quarterly report. In 2023, the company achieved operating income of 1,199 million yuan, a year-on-year increase of 3.07%, and a net profit of 0.81 million yuan, an increase of 15.56% over the previous year. It plans to distribute a cash dividend of 1.00 yuan (tax included) to all shareholders; 24Q1 achieved revenue of 287 million yuan, an increase of 23.32% year on year, and net profit of 127.22,900 yuan, an increase of 20.45% year on year.
Brief review
1. In 24Q1, the volume of the company increased rapidly, and the growth rate of the enzyme preparation sector was impressive
By product, in 2023, the company achieved revenue of 441 million yuan (YoY +4.69%), microecological formulations revenue of 237 million yuan (YoY -5.56%), animal health products revenue of 297 million yuan (YoY -0.62%), and other revenue of 202 million yuan (YoY +23.78%). 24Q1's enzyme preparations achieved revenue of 111 million yuan (+34.69% year over year), and microecological preparations achieved revenue of 444.29 million yuan (-7.99% year over year).
By sales model, in 2023, the company's direct sales channel achieved revenue of 777 million yuan (YoY +6.47%), distribution channel revenue of 401 million yuan (YoY -1.11%); 24Q1 direct sales model achieved revenue of 129 million yuan (YoY +19.17%), and the distribution model achieved revenue of 64.5022 million yuan (YoY +39.08%).
Judging from the production and sales situation, in 2023, sales volume of enzyme preparations was 16,600 tons (+2.83% YoY), sales volume of microecology products was 2916.74 tons (YoY +4.69%), sales volume of Chinese veterinary drugs was 1227.95 tons (+12.13% YoY), and sales volume of biological products was 7.050 billion tonnes (YoY +9.73%).
In terms of profit margin, the company's gross sales margin in 2023 was 46.23% (YoY +3.00pcts), and the net sales margin was 8.58% (YoY +1.24pcts); 24Q1's gross sales margin was 44.46% (YoY +0.65pcts), and the net sales margin was 5.98% (YoY +0.59pcts).
In terms of expenses, 24Q1's sales expenses were 43.7577 million yuan (YoY +9.84%), management expenses were 356.347 million yuan (YoY +17.74%), financial expenses were 50.59 million yuan (+78.82% YoY), and R&D expenses were 26.7173 million yuan (YoY +17.90%).
2. The industrial layout of each sector has been basically completed, and the animal health system has now been basically built in the systematic production capacity layout of the company's major business segments. The Blue Biotechnology Center, the Microecological Formulation Project for Plants, and the Animal Protection Industrial Park have all been put into production and operation; the Weifang Kangdian Refined Enzyme series product production line construction project is under smooth preparation and is expected to be put into production and operation in December 2024. It is expected that the strength in terms of products, production capacity, market share and channels will be further enhanced in the future. In terms of animal protection products, new products in the company's R&D reserves, such as the porcine round-para-pig-streptococcus triple inactivated vaccine and the chicken Xincheng disease avian influenza double inactivated vaccine (suspension culture), have been registered as new veterinary drugs. Currently, there are still gaps in the country in terms of multi-vaccine varieties and production processes. The market prospects are broad and highly competitive. In 2023, the company acquired 51% of the shares of Qingdao Runbote Biotechnology Co., Ltd. Runbote has a rich heritage in antibiotic substitution, especially tannic acid research. It is expected to complement the company's existing business, form a complete system of antibiotic replacement, effectively improve the Blue Bio Animal Health System, and provide customers with system solutions. A richer product matrix will greatly enhance the company's market competitiveness.
3. Continue to increase R&D and innovation, and carry out in-depth international cooperation in various fields. In 2023, the company invested 110 million yuan in R&D, accounting for 9.23% of revenue, and is at a high level in the industry. By the end of 2023, the company and its subsidiaries had 390 domestic authorized invention patents, 9 US authorized patents, 2 European authorized patents, 27 international PCT applications, and 39 new veterinary drug registration certificates (including 3 new national first-class veterinary drugs). In terms of globalization, the company further deepens cooperation with international enterprises and continues to strengthen the “Belt and Road” industrial layout. Based on the platform advantages of enzyme preparations, cooperation between Blue Biotech and the world's top 500 ADM companies continues to deepen; in the field of microecology, the company's cooperation with German Evonik Industrial Group (EVONIK) is further deepening cooperation from OEM to ODM. The two sides jointly set up a joint venture and officially put into operation in January 2024. Blue Biotech's subsidiary will be commissioned by the joint venture company to produce GHS products for them using exclusive OEM processing.
The company continues to strengthen in-depth cooperation with leading international enterprises, which is conducive to enhancing the company's international influence and achieving an international layout of business and channels.
4. Profit prediction and rating: At present, the company's systematic production capacity layout in various sectors has basically been completed. Continuously improving the animal health system through endogenous epitaxial methods, it is expected to improve customer stickiness and market competitiveness. At the same time, the company focuses on R&D and innovation, and continues to carry out in-depth cooperation with leading international companies to expand the international market. The company is expected to achieve operating income of 13.21/14.57/16.16 billion yuan in 2024-2026, net profit to mother of 0.98/1.17/136 million yuan, EPS of 0.39/0.46/0.54 yuan respectively, and corresponding PE of 29.63x/24.89x/21.30x respectively, maintaining a “gain” rating.