Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 5.64 billion yuan (+3.2%), net profit of 600 million yuan (-29.1%), net profit of non-return to mother of 550 million yuan (-28.6%); 2024Q1 realized revenue of 1.11 billion yuan (-22.1%), net profit to mother of 60 million yuan (-72%), net profit of non-return to mother of 60 million yuan (-73.4%).
Revenue grew steadily in 2023. In 2023, the company's formulation division achieved revenue of 3.07 billion yuan (+15.31%), the bioprocess division achieved revenue of 1.33 billion yuan (-21.64%), the engineering division achieved revenue of 590 million yuan (-0.08%), the food division achieved revenue of 330 million yuan (+0.33%), after-sales service and accessories achieved revenue of 320 million yuan (+32.7%), and other business revenue of 0.1 billion yuan (+217.78%). The overseas business achieved revenue of 1.25 billion yuan, accounting for 22.21% (+19.45%) of revenue. The company's gross margin in 2023 was 35.33%, -3.72pp. In 2023, the company's management/sales/R&D expenses were 340 million/550 million/380 million yuan respectively, up 30.2%/17.43%/14.03% year-on-year. In 2024, Q1 achieved revenue of 1.11 billion yuan (-22.07%), and net profit decreased by 72.01% compared to the same period. Mainly affected by market competition, the company made dynamic adjustments to strategies such as product coverage, customer coverage and regional coverage, which led to a decline in gross margin.
Continuously expand business and cultivate overseas markets: The company has advantages including strong innovative R&D capabilities, perfect sales network, leading brand advantages, and the ability to provide comprehensive solutions; compared with leading foreign companies, the company still faces challenges in expanding scale and developing core technology. The company proposed the “M+E+C (AI)” strategy, focusing on research on drug manufacturing science and pharmaceutical mechanism science, implementing the integration of pharmaceutical equipment and pharmaceutical processes, and firmly promoting the internationalization strategy.
Profit forecast: Net profit for 2024-2026 is expected to be $320 million, $390 million, and $450 million respectively.
Risk warning: Risks such as downstream demand sentiment falling short of expectations, company R&D progress falling short of expectations, and deterioration of the competitive landscape.