Revenue growth resumed in 2023 and the loss was reversed. The company's revenue in 2023 was 3.48 billion yuan, up 10% year on year. Net profit due to mother was 860 million yuan, after deducting non-net profit of 720 million yuan. Profit reversed losses, and net cash flow from operating activities was 1.03 billion yuan, up 89% year on year. The company's routine vaccines (excluding COVID-19 vaccines) achieved sales revenue of 3.50 billion yuan, an increase of 19% over the previous year. Among them, sales revenue of the 13-valent pneumococcal polysaccharide conjugate vaccine increased 56% year over year, and sales revenue of the 23-valent pneumococcal polysaccharide vaccine increased 37% year over year.
Revenue and profit declined in 2024. The company's revenue for the first quarter of 2024 was 450 million yuan, down 40% year on year, net profit to mother of 54.07 million yuan, down 74% year on year. After deducting non-net profit of 14.38 million yuan, down 92% year on year, net profit outflow from operating activities was 76.18 million yuan, down -159% year on year.
The human diploid rabies vaccine is expected to drive new growth. The company's human diploid rabies vaccine obtained a batch issuance certificate in December 2023. The freeze-dried human rabies vaccine (human diploid cells) is the first “four-dose” human diploid rabies vaccine approved in China.
The launch of the 13-valent pneumonia vaccine overseas is progressing steadily. In October 2023, the company's 13-valent pneumococcal polysaccharide conjugate vaccine obtained Indonesia's “marketing license”, indicating that the vaccine has met the basic conditions for sale in the Indonesian market, and the company has signed a “sales contract” for the 13-valent pneumococcal polysaccharide conjugate vaccine with an Indonesian partner.
The company announced a new round of stock options and restricted stock incentive plans. According to the plan, the exercise price of stock options was 25.39 yuan/share, with 8.0840 million shares granted for the first time, for 458 people; the grant price for restricted shares was 15.87 yuan/share, and 166.37 million restricted shares were granted for the first time, and 462 people were awarded. The assessment year for this plan is for the three fiscal years 2024-26. The fixed net profit growth rates for the 1st, 2nd, and 3rd execution/vesting periods were ≥ 25%, ≥ 50%, and ≥ 70%, respectively. The initial grant of options and restricted stock amortization fees had a total impact on the company's 2024-27 profit of RMB 10.2.72 million, RMB 62.32 million, RMB 3.67 million, and RMB 4.52 million, respectively.
Profit forecasting and valuation. We expect the company's net profit to be earned in 2024-26 to be 1.09 billion yuan, 1.32 billion yuan, and 1.55 billion yuan, respectively, with year-on-year increases of 27%, 20%, and 18%, respectively. Referring to comparable companies, Wantai Biotech, Baike Biotech, and Zhifei Biotech's 2024 PE was 146 times, 20 times, and 8 times, respectively. The company is a vaccine leader with excellent R&D, production and sales in China. We gave the company a 2024 P/E 20 to 25 times, a reasonable value range of 19.59 to 24.49 yuan, and a market value of 21.9 to 27.4 billion yuan, and a “superior to the market” rating.
Risk warning. Risk of product release falling short of expectations, risk of R&D failure.