Incident: The company released its 2023 annual report, achieving operating income of 3.48 billion yuan, an increase of 10.1% over the previous year; realized net profit attributable to shareholders of the parent company of 860 million yuan (+749%); and realized net profit of 720 million yuan (+495%) after deduction. In the first quarter of 2024, we achieved operating income of 450 million yuan, a year-on-year decrease of 39.7%; realized net profit attributable to shareholders of the parent company of 54 million yuan (-73.7%); and realized net profit of 14 million yuan (-92.4%) after deduction.
Conventional vaccines are growing steadily. On a quarterly basis, the company's revenue for the 2023Q1/Q2/Q3/Q4 quarter was 7.5/9.8/7.3/1.01 billion yuan (-14.1%/+2.7%/-0.5%/+71%), and realized net profit to mother was 2.1/3.1/1.9/160 million yuan (-25%/+299%/+125.8%/+148.9%), respectively. In terms of profitability, the company's gross margin in 2023 was 84.5% (+0.37pp), sales expenses ratio was 35.4% (+1pp), and management expenses ratio was 7.9% (+0.63pp), which remained stable. The net interest rate was 24.8% (+28.97pp), mainly due to the impairment of COVID-19 assets in the same period last year and the low R&D cost treatment base. The R&D expense ratio was 14.4% (-9pp).
Conventional vaccines have seen steady growth. Conventional vaccines (excluding COVID-19 vaccines) achieved sales revenue of 3.5 billion yuan, an increase of 19% over the previous year. Among them, the sales revenue of the 13-valent pneumonia vaccine increased 55.6% year-on-year, and the revenue of the 23-valent pneumopolysaccharide vaccine increased 36.9% year-on-year. Judging from batch issuance data, the quadruple vaccine achieved batch issuance of 2,422 million doses (-30.9%), 1.05 million doses of the 13-valent pneumonia vaccine (-58.7%), and 100,000 doses of the human diploid rabies vaccine.
Over the next 2-3 years, product approvals will grow step-wise, contributing to the company's long-term performance growth. In addition to the freeze-dried human rabies vaccine (human diploid cells) and the live attenuated chickenpox vaccine (Vero cells), the Sabin strain polio inactivated vaccine (Vero cells) application was accepted; adsorbed tetanus vaccine and quadrivalent influenza virus lysis vaccine are in phase I and III clinical trials; the adsorbed cell-free perchlorovirus (component) combination vaccine has completed phase I clinical trials. Phase III clinical preparations are underway; the oral pentavalent live attenuated rotavirus vaccine (Vero cells) is in phase I and phase II clinical trials; adsorption of cell-free leukocytosis inactivated polio The combination vaccine with Haemophilus influenzae type b (quintuplets) and the adsorbed acellular proteinococcal polio combination vaccine is in phase I clinical trials; the measles combined live attenuated vaccine and the 20-valent pneumococcal polysaccharide conjugate vaccine have obtained drug clinical trial approval notices.
Profit forecast: EPS is expected to be $0.79, $1.06 and $1.32 for 2024-2026, respectively.
Risk warning: Risk of new product development falling short of expectations, risk of product price reduction.