Incident Overview
(1) The company announced its 2023 annual report: 23 achieved operating income of 255 million yuan, a year-on-year decrease of 29.69%, realized net profit to mother of 128 million yuan, and realized deduction of non-net profit of 133 million yuan.
(2) The company announced its 2024 quarterly report: 24Q1 achieved operating income of 60 million yuan, a year-on-year increase of 93.48%, realized net profit to mother of -42 million yuan, and realized deduction of non-net profit of -47 million yuan.
Analytical judgment:
The 23-year performance is under pressure, and the performance of the new capacity investment industry in Lingang is expected to improve sequentially
The company achieved revenue of 205 million yuan in '23, a year-on-year decrease of 29.69%. Among them, the gene therapy CDMO business achieved revenue of 107 million yuan, a year-on-year decrease of 50.64%, mainly affected by slowing downstream customer financing, slowing pipeline promotion, and falling order prices. Along with the commissioning of new production capacity in Lingang and upward growth in new orders, the company achieved revenue of 60 million yuan in 24Q1, an increase of 93.48% over the previous year. Among them, the gene therapy CDMO business achieved revenue of 38 million yuan, an increase of 146.50% year on year, showing a month-on-month improvement.
(1) The gene therapy CDMO business is expected to show a month-on-month improvement: as of 24Q1, the company has helped customers obtain 36 IND application approvals from China and the US (including 11 US FDA approvals), and continues to empower customers. The company signed more than 250 million yuan in new orders in '23 and more than 80 million yuan in 24Q1 (new orders over 50 million yuan in 23Q1), and the order side showed a month-on-month improvement; in addition, in September '23, the first phase of production of Shanghai Lingang's 77,000 ping products and the company continued to strengthen R&D and enhance the scope and field of service capabilities. The company's 24Q1 gene therapy CDMO business achieved revenue of 38 million yuan, an increase of 146.50% over the previous year, showing a gradual recovery. Looking ahead to the future, along with the month-on-month improvement on the demand side and the continued increase in supply-side capacity, we judge that the company's gene therapy CDMO business is expected to show a gradual improvement trend.
(2) The gene therapy CRO business continues to show steady growth. The company's gene therapy CRO business achieved revenue of 79 million yuan and 018 million yuan respectively in '23 and 24Q1, up 20.56% and 30.98% year on year, respectively, and continues to show a steady and rapid growth trend. The company is actively expanding gene therapy CRO services. By the end of 23, it had served more than 10,000 R&D laboratory customers, an increase of 20% + compared to the end of '22, and continued to empower scientific research services.
Investment advice
Taking into account factors such as disruptions caused by the epidemic and early reserve of talent for subsequent new production capacity, the 24-25 profit forecast was adjusted, that is, the forecast for 2024-2026 was adjusted from 5.16/6.85/NA 100 million yuan to 2.56/309/374 million yuan, and EPS was adjusted from 0.09/0.13/NA yuan to -0.24/-0.22/-0.19 yuan, corresponding to the closing price of 6.26 yuan/share on May 6, 2024, PE was -26/-28/ -33 times, respectively. The company's long-term development is optimistic and maintains a “buy” rating.
Risk warning
Risk of loss of core technical backbone and management; risk of increased competition; risk of service pipeline advancement falling short of expectations; risk of changes in regulatory policies in the field of gene therapy