The impact of the company's generic drug collection is basically clear, and performance is expected to grow steadily. The company promotes sales of neuropsychiatric products such as levetiracetam tablets, sertraline hydrochloride tablets and dispersible tablets, praxol hydrochloride tablets, and sustained-release tablets by establishing a “split line” marketing model centered on the three major channels of neuropsychiatric, cardiovascular, and digestive channels. At the same time, the market recognition of new rehabilitation solutions for digestive tracts continues to increase. In 2023, Jing Changle became a variety with annual sales exceeding 300 million yuan after levetiracetam tablets. In December 2023, the company's innovative drug, Dacinib, was approved as the first new drug for insomnia in China in 16 years. After marketing, it is expected to fill the gap in unmet demand for sedative and hypnotic drugs. We are optimistic about the company's development. The company's net profit for 2024-2026 is 658 million yuan, 741 million yuan, and 864 million yuan, respectively, and EPS is 0.76 yuan, 0.86 yuan, and 1.00 yuan respectively. The current stock price corresponds to PE of 14.0, 12.5, and 10.7 times, respectively, covered for the first time, giving the company a “buy” rating.
The company is steadily promoting production capacity construction and actively improving terminal sales efficiency, which is expected to bring additional performance in 2023. The construction of the company's main production base is progressing in an orderly manner: the company actively promotes the construction of a project to increase production capacity with an annual output of 3 billion tablets of solid preparations to provide strong support for the further expansion of domestic and foreign trade of formulations; the Inner Mongolia Jingxin Traditional Chinese Medicine Production Base Project successfully carried out commercial production to provide a capacity guarantee for the company's traditional Chinese medicine business expansion; the first phase of the Shandong API base project was completed, laying the foundation for the company's cost advantage. The company is actively expanding sales channels outside the hospital, cooperating deeply with mainstream platforms such as Ali Health and Jingdong Health, while actively promoting the downsizing and expansion of primary hospitals within the hospital. The gradual increase in terminal sales efficiency is expected to result in additional performance.
There is a lot of potential space in the insomnia chemical drug market. The innovative drug Dacinib can be expected to grow, and the market for insomnia drugs is large in China. According to Frost & Sullivan, the number of insomniacs will increase to 300 million by 2025, reaching 330 million by 2030; the market size of insomnia drugs in China is expected to reach 15.12 billion yuan by 2025, and to 21.19 billion yuan by 2030. At present, the company's innovative drug Dysacinib has been approved for marketing. It has become the first new drug for insomnia in China in 16 years. Moreover, didacinib has the advantages of not being easily tolerated, addictive, and easily tolerated by the elderly. After marketing, it is expected to fill the gap in unmet medical demand for sedative and hypnotic drugs.
Risk warning: risk of changes in industry policy, risk of new drug development, risk of raw material supply and price fluctuations, etc.