Incident: The company released its 2023 annual report, achieving operating income of 3.276 billion yuan, -8.58%; net profit to mother of 210 million yuan, -31.75% year over year; net profit after deducting non-return to mother of 212 million yuan, -26.17% year over year; net operating cash flow of 277 million yuan, -72.21% year over year; EPS (basic) 0.25 yuan. The results are in line with market expectations.
The company released its 2024 quarterly report, achieving operating income of 647 million yuan, -23.90%; net profit to mother of 64 million yuan, +28.38% year over year; net profit after deducting non-return to mother of 55 million yuan, +29.40% year over year; net operating cash flow of -165 million yuan, an increase in negative year-on-year value; and EPS (basic) 0.08 yuan. The results are in line with market expectations.
Comment:
Cycle fluctuations and collection of heparin APIs affected current performance. The nuclear drug business remained steady: 2023Q1-2024Q1. The company's revenue in a single quarter was 8.51/9.35/8.00/6.90/ 647 million yuan, respectively, -3.32%/+5.56%/-18.03%/-17.97%/-23.90%; net profit to mother of 0.50/1.34/1.02/0.64 billion yuan, year-on-year, -8.77%/+17.91%/-37.18%/-7.18%/increase in losses /+ 28.38%; net profit without return to mother 0.42/1.31/0.77/ -0.38/0.55 billion yuan, -21.01%/+19.54%/-51.32% /loss expansion/ 29.40% year-on-year. The preparation for asset impairment in 2023 reduced net profit attributable to shareholders of listed companies by $93.226 million. Looking at the 2023 revenue segment: Nuclear drug sales revenue of 1,017 billion yuan, +11.20% year over year, of which 18F-FDG revenue was 420 million yuan, +12.00% year over year, Yunke injection revenue was 244 million yuan, +19.52% year over year, and technetium label-related drug revenue was 100 million yuan, -3.23% year over year; API sales revenue was 1,678 billion yuan, -18.61% year over year, mainly due to the global heparin industry sluggishness, insufficient demand, and reduced procurement volume due to backlog of raw materials from downstream customers; formulation business The sales revenue of the sector was 400 million yuan, -17.20% year-on-year, mainly due to the fact that nadroparin calcium injections won the bid for the 8th batch of centralized national drugs in March 2023, and sales prices declined.
Vigorously invest in R&D to promote innovation and upgrading of nuclear drugs: In 2023, the company invested 313 million yuan in R&D, an increase of 77.23% over the previous year. Among them, nuclide drug research and development investment accounted for 76.73%, R&D expenses amounted to 197 million yuan, and R&D expenses rate 6.02%. The company uses Lanna as a completely innovative nuclear drug research and development platform, and uses Andike as an imitation nuclear drug platform to integrate the company's R&D resources and promote nuclear drug research and development. By the end of 2023, progress on some key products was that fluorine [18F] siruitide injections are undergoing phase III clinical trials, fluorine [18F] alfaceptide injections are in phase III clinical trials, phase III clinical trials of APN-1607 products have completed pre-NDA data compilation work, and bone scanning imaging agents for sodium fluoride injections have been submitted for marketing and are awaiting subsequent approval. As the company's nuclear innovative drug product line continues to be rich, the future is expected to enter a new era of innovation-driven development.
Profit forecast, valuation and rating: Due to fluctuations in the heparin API cycle and increased investment in R&D, the net profit forecast for 2024-2025 was lowered to 306/366 million yuan (the original forecast was 503/615 million yuan, down 39%/41%, respectively), and the net profit for 2026 was 430 million yuan. The PE corresponding to the current price was 37/31/27 times, respectively. Considering the scarcity of nuclear drug assets, the “buy” rating was maintained.
Risk warning: Risk of nuclear drug development falling short of expectations; risk of heparin cycle fluctuations.