1 季度猪用疫苗和化药拖累收入表现，禽用疫苗表现稳健。按照业务类型来看，2023 年公司猪用疫苗收入4.34 亿，yoy-5.92%，下游养殖持续低迷拖累产品需求；禽用疫苗及抗体4.16 亿，yoy+10.2%；反刍疫苗118.3 万；化药3.79 亿，yoy+10.14%；功能性保健品804 万，yoy+272.34%；技术许可或转让465.5 万，yoy-85.53%。2024 年1 季度猪用疫苗收入7491 万元，yoy-25.08%，因下游需求低迷，叠加客户资金紧张公司为控制回款风险所致；禽用疫苗及抗体9219万，yoy+7.53%；反刍疫苗70.5 万；化药5398 万，yoy-52.8%，因消毒剂产品去年同期高基数所致；功能性保健品235 万，yoy+81.38%；技术许可或转让952 万，yoy+270.27%。另外，按照销售模式来看，23 年直销收入7.69 亿，yoy+4.78%；经销4.57 亿，yoy+3.75%；政采1156 万，yoy+14.88%。Matters:
The company released its 2023 annual report and 2024 quarterly report: in 2023, it achieved revenue of 1,253 million yuan, yoy +1.84%, net profit of 175 million yuan, yoy +3.99%, deducted from non-return mother of 154 million, yoy -0.17%. 2024Q1 achieved revenue of 235 million yuan, yoy -23.27%, to mother of 27.31 million, yoy -57.36%, deducted from non-return mother of 26.54 million, yoy -56.10%.
Commentary:
In the first quarter, swine vaccines and chemicals dragged down revenue performance, while poultry vaccine performance was steady. According to business type, the company's pig vaccine revenue in 2023 was 434 million, yoy -5.92%, and downstream farming continued to slow down product demand; poultry vaccines and antibodies 416 million, yoy +10.2%; ruminant vaccines 1.183 million; chemicals 379 million, yoy +10.14%; functional health products, 8.04 million, yoy +272.34%; technology licensing or transfer of 4.655 million, yoy -85.53%. In the first quarter of 2024, pig vaccine revenue was 74.91 million yuan, yoy -25.08%, due to low downstream demand, compounded by tight customer capital to control repayment risk; 92.19 million poultry vaccines and antibodies, yoy +7.53%; ruminant vaccines 705,000; 53.98 million chemicals, yoy -52.8%, due to the high base of disinfectant products in the same period last year; 2.35 million, yoy +81.38%; technical licensing or transfer of 952 million, yoy +270.27%. In addition, according to the sales model, direct sales revenue in '23 was 769 million, yoy +4.78%; distribution was 457 million, yoy +3.75%; government procurement was 11.56 million, yoy +14.88%.
Gross margin improved markedly in the first quarter, but net profit margins were under pressure. In 2023, the company achieved a gross profit margin of 61.01%, yoy-1.75pct. The gross profit margin for pig vaccines was 83.89%, yoy +2.39pct, bucking the trend; the gross profit margin for poultry vaccines and antibodies was 55.34%, yoy+0.32pct; the gross profit margin for chemicals was 42.18%, yoy-2.42pct. In the first quarter of '24, the company achieved a gross profit margin of 64.41%, yoy+5.43pct, an increase of 5.28pct over 23Q4. However, the cost rate increased sharply during the reporting period. The sales, management, R&D, and finance cost rates were 26.92%, 14.55%, 8.69%, and -0.3%, respectively. The year-on-year ratio was +1.93pct, +9.22pct, +3.09pct, and -0.28pct, respectively. Among them, the management fee rate increased sharply, mainly due to the transformation of Nanjing Placo's highly pathogenic avian influenza vaccine production base but not yet put into production and included in management expenses. The company's net profit margin for the first quarter was 11.60%, yoy-9.82pct.
Investment advice: Adhere to the strategy of large single products and large customers at the bottom of the cycle. The operation is expected to gradually usher in marginal improvements and maintain strong ratings. Although the downstream aquaculture industry continues to be sluggish, the company continues to implement the “big single product” and “big customer” sales strategy and comprehensively improve the sales management system. In 23, core products, including the round branch and the swine diarrhea series vaccine, all achieved five consecutive years of growth, and sales revenue for TOP30 Breeding Group customers and their share of revenue increased year-on-year. As pig production capacity continues to decline in the early stages, the boom in the breeding industry is expected to recover this year. The company continues to improve competitiveness in multiple dimensions of research, production, and sales, and is expected to usher in operational improvements as downstream recovery. However, considering the pace of recovery in demand and the current state of industry competition, we adjusted our forecast for 24-25 net profit of 211 million or 277 million (previous values were 3.25 and 3.81), and introduced a profit forecast of 320 million for 26 years. Taking into account the company's historical valuation level, comparable company valuation level in the same industry, and the company's performance growth, 32 times PE was given in 24 years, the target price was adjusted to 19.52 yuan, and the “strong push” rating was maintained.
Risk warning: Downstream demand recovery falls short of expectations, slow progress in product development, intensifying market competition, etc.