Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 544 million yuan (+14.59%), revenue after deducting specific acute respiratory infectious disease-related products of 499 million yuan (+29.46%), net profit to mother of 154 million yuan (-24.61%), and net profit of 140 million yuan (-23.42%) after deducting products related to specific acute respiratory infectious diseases. 24Q1 achieved operating income of 146 million yuan (+6.67%), revenue after deducting products related to specific acute respiratory infectious diseases was 138 million yuan (+16.00%), net profit to mother was 30.67 million yuan (-31.91%), and net profit after deducting non-return to mother was 30.28 million yuan (-32.12%).
Comment:
The company further explores the international market and has established a number of new overseas subsidiaries in Europe and Japan. The sales network already covers major countries and regions such as North America, Asia Pacific and Europe. In 2023, the company's overseas non-COVID-19 business achieved revenue of 330 million yuan (+37.08%, accounting for 66.11% of revenue), of which the Americas/Europe/Asia Pacific region accounted for 46%/14%/5.7% of revenue, respectively, and Europe's share increased.
The company's products can be used in key aspects of the drug discovery to clinical trial development and commercial production, such as target discovery and verification in biopharmaceuticals and cell therapy, screening and optimization of drug candidates, CMC development and pilot production, pre-clinical research, clinical trials, and commercial production. Judging from the company's recombinant protein sales in 2023, the total number of products over 500,000 was 196, accounting for 5.61% of the volume, accounting for 46.90% of revenue, and the share of major customer purchases further increased.
In 2023, the company sold and applied more than 4,500 biological reagent products such as recombinant proteins and antibodies, and accumulated rich experience in research, production and analysis. The company continues to increase R&D investment. It invested 125 million yuan (+9.72%) in R&D in 2023, and has 247 R&D personnel (+30.69%), injecting strong innovation impetus into the company's development. While deepening the technical advantages of original recombinant proteins and antibodies, the company actively lays out related products in the field of CAR-T cell therapy. On the basis of having a GMP quality management system platform, combined with cell therapy drug production specifications, the company has successfully developed nearly 30 high-quality GMP grade products, which are suitable for CGT drug CMC, commercial production and clinical research. In addition, the company is actively expanding related products and technical services to cover the entire process of ADC drugs, from antibody preparation, screening, coupling to post-production quality control, to accelerate the development process of ADC drugs.
Profit forecast: We expect the company to achieve net profit of 178/211/251 million yuan in 2024-2026, up 15.7%/18.9%/19.0% year-on-year respectively. We believe that the company is deeply involved in the field of recombinant protein research and development, and that its good product strength has enabled the company to have a good reputation among industrial customers. The layout of overseas business helps further open up the market pattern. We gave the company 25-30X PE in 2024, with a corresponding reasonable value range of 37.02-44.42 yuan, maintaining a “superior to the market” rating.
Risk warning: risk of import substitution falling short of expectations, risk of increased market competition, risk of failure in new product development.