Incident: The company released its 2023 annual report, achieving operating income of 2,329 billion yuan, -3.18%; net profit to mother of 612 million yuan, +4.25% year over year; net profit after deducting non-return to mother of 565 million yuan, +9.08% year over year; net operating cash flow of 679 million yuan, +29.53% year over year; EPS (basic) 0.84 yuan. The results are in line with market expectations.
The company released its 2024 quarterly report, achieving operating income of 436 million yuan, +67.00%; net profit to mother of 122 million yuan, +116.31% year over year; net profit after deducting non-return to mother of 108 million yuan, +196.85% year over year; net operating cash flow of -52 million yuan, which turned negative year on year; EPS (basic) 0.17 yuan. The results are in line with market expectations.
Comment:
Multiple factors drove rapid growth in performance. The scale of pulping reached the first tier of the kiloton scale: 2023Q1-2024Q1. The company's revenue in a single quarter was 2.61/4.48/6.66/9.54/436 billion yuan, respectively, -47.87%/-8.65%/+32.51%/+4.63%/+67.00%; net profit to mother 0.56/0.87/1.83/2.86/122 million yuan, YoY -46.62%/+42.42%/+20.34% /+ 116.31%; net profit of non-attributable net income of 0.36/0.68/1.66/2.95/108 million yuan, year-on-year ratio, -59.73%/-33.25%/+54.38%/+34.95%/+196.85%. The main factors for the rapid increase in performance include a sharp increase in pulp volume, booming sales demand (in particular, insufficient supply of albumin and static acrylic), and deepening business changes. In 2023, the amount of slurry harvested exceeded 1,200 tons, a significant increase over the previous year. Currently, Guangdong Shuanglin has 19 single plasma collection stations, 17 of which have been collected, and 2 have been completed and are awaiting inspection; Pacifico has 19 single plasma collection stations, 17 have already been collected, and 2 have been completed and are awaiting inspection. It is expected that they will all complete inspection and begin pulp collection in the first half of 2024. The total number of pulp stations in the company has reached 38. Currently, it is in the top three in the industry, and the scale of pulp collection ranks first in the kiloton level in the blood products industry.
Continued investment in the development of new products to improve the overall utilization rate of plasma: Currently, Guangdong Shuanglin has 8 varieties in 3 categories, and Pacifico has 9 varieties in 3 categories, bringing the total number of varieties to 11. The company is developing more than 10 products at a rapid pace. The number of products will continue to increase in the future, and the number of products will rank among the highest in the industry.
Among them, Guangdong Shuanglin's new-generation intravenous human immunoglobulin has been declared clinically and is currently in the clinical data review stage. With the continuous increase in the number of the company's blood products and the upgrading of products such as isopropyl, the company's comprehensive plasma utilization rate is expected to continue to increase, laying a solid foundation for long-term growth.
Profit forecast, valuation and rating: Considering the rapid recovery of the company's pulp harvesting volume, the 2024-2025 net profit forecast was raised to 7.82/934 million yuan (the original forecast was 745/863 million yuan, up 5%/8%, respectively), and the additional forecast was 1,086 billion yuan for 2026, up 27.71%/19.54%/16.20% year-on-year. The PE corresponding to the current price was 27/23/20 times, maintaining the “buy” rating.
Risk warning: Risk of pulping falling short of expectations; risk of batch issuance falling short of expectations.