Incident Overview
(1) The company announced its 2023 annual report: 23 achieved operating income of 1,263 billion yuan, a year-on-year increase of 25.24%, and realized net profit of 289 million yuan, an increase of 37.19% year-on-year, and realized deducted non-net profit of 261 million yuan, an increase of 26.38% over the previous year.
(2) The company announced its 2024 quarterly report: 24Q1 achieved operating income of 336 million yuan, a year-on-year increase of 11.08%, and realized net profit of 82 million yuan, an increase of 79.14% over the previous year, and realized deducted non-net profit of 82 million yuan, an increase of 87.43% over the previous year.
Analytical judgment:
Performance showed rapid growth, and didroprogesterone preparations gradually contributed to the increase in core performance
The company achieved revenue of 1,263 billion yuan in 23 years, a year-on-year increase of 25.24%, and achieved revenue of 336 million yuan in 24Q1, an increase of 11.08% over the previous year. We determine that it mainly benefited from the continuous release of didroprogesterone preparations, abiraterone APIs, and cardiovascular APIs. Looking ahead, products such as dodroprogesterone, abiraterone, flumethasone, fluticasone, and epleridone will continue to grow, with new products (buvacetam, bepidoic acid, enzalutamide, noxinacin sodium, enzalutamide, dotilavir sodium, simeglutide, etc.) and preparations such as didroprogesterone, which we determine will continue to grow rapidly for the next 3 to 5 years.
(1) The formulation business gradually contributed to the increase in core performance. The company's didroprogesterone tablets were approved for marketing in June 2023. By the end of 23, didroprogesterone tablets had been listed in 24 provinces and cities, and 1,058 hospitals (including community outpatient clinics) had achieved revenue of 90 million yuan in 2023, showing a gradual increase in volume. Looking ahead to the full year of 24, we determine that as the number of people connected to the internet and hospital admissions continues to increase, didroprogesterone tablets will contribute to the increase in core performance.
(2) API business: Products such as abiraterone, eplerone, and bepidic acid are rapidly being released. The company's API and intermediates business achieved revenue of 1,059 billion yuan in 23 years, an increase of 16.06% over the previous year, mainly benefiting from the rapid release of products such as abiraterone, epleridone, and bepiidoic acid. The central vascular category achieved revenue of 300 million yuan, an increase of 26.94%; the anti-tumor category achieved revenue of 244 million yuan, a year-on-year increase of 73.63%; the women's health category achieved revenue of 189 million yuan, an increase of -2.86%; the respiratory system category achieved revenue of 163 million yuan, an increase of 7.48%; the neurological category achieved revenue of 74 million yuan, an increase of -26.74%; the anti-infective category achieved revenue of 0.18 billion yuan, a year-on-year increase of -60.32%. 68.13% Looking forward to the future, as cardiovascular, anti-tumor, and respiratory APIs continue to be released, we judge that the company's API business will continue to show rapid growth.
With the commissioning of simeglutide API production capacity, it is expected to contribute to the company's performance flexibility
According to the 2023 annual report, the construction of the company's Yangzhou Orient fermentation workshop plant and synthesis workshop with an annual production capacity of 300 kg of simeglutide APIs has been completed. With subsequent production capacity put into operation, and according to PharmacoSmart Network data, the company's simeglutide APIs have achieved DMF filing in the US. We determine that with the increase in terminal demand volume and R&D demand, the company's simeglutide raw materials will show moderate volume and are expected to contribute to the company's performance flexibility.
Investment advice
The company continues to be deeply involved in the field of specialty APIs. Looking forward to the continuous release of stocks (didroprogesterone, abiraterone, fluticasone, epleridone, etc.) in the next few years, as well as potentially major products (bepidoic acid, bouvaracetam, enzalutamide, budesonide, noxinacin sodium, dotilavir sodium, simeglutide, etc.), and the small nucleic acid polypeptide business with integrated superposition formulations will add impetus to the company's future performance growth. It will continue to show rapid growth over the next few years. Considering fluctuations in product performance, the 24-25 profit forecast is adjusted, that is, we forecast that the revenue for 2024-2026 will be adjusted from 16.54/20.4/NA billion yuan to 17.12/21.57/2,614 billion yuan, and the corresponding EPS will be adjusted from 0.95/1.33/NA yuan to 0.89/1.21/1.54 yuan, corresponding to the closing price of 24.41 yuan/share on April 30, 2024, PE will be 27/20/16 times, respectively, maintaining the “gain” rating.
Risk warning
The product line under development fell short of expectations; sales of didroprogesterone preparations fell short of expectations; exchange rate fluctuations and geopolitics caused uncertainty in the company's business; there is a risk of uncertainty about the future development of the small nucleic acid and peptide business with a strategic layout