Incidents:
On April 25, 2024, Qianhong Pharmaceutical disclosed the 2023 annual report and the 2024 quarterly report. In 2023, the company achieved operating income of 1,814 billion yuan, -21.24% year on year; realized net profit of 182 million yuan, or -43.77% year on year; realized net profit without return to mother of 143 million yuan, or -44.43% year on year. 2024Q1 achieved operating income of 461 million yuan, -24.19% year over year; net profit to mother of 104 million yuan, +21.13% year over year; net profit after deducting non-return to mother of 102 million yuan, +19.11% year on year.
Deeply cultivate enzyme preparations and heparin preparations in the domestic market to enhance the core competitiveness of the brand. In 2023, the company's Yikai series products follow the national treatment guidelines for chronic complications of diabetes, implement the marketing strategy of multi-department multi-indication expansion and market academic promotion, and market share and sales continue to rise; in addition to strengthening hospital brand development, Yimei products actively explore new OTC strategic cooperation models with Bayer Pharmaceuticals in Germany to continuously enhance brand awareness and market competitiveness, and further increase sales; heparin sodium injections and encapsulants continued to expand their market share and maintain a leading market share in the country Status: Enoxaparin series products promptly seize policy opportunities for national procurement, are dominated by rapid increases to seize market share, and gradually develop into an important economic growth point.
The innovation system has been built up and developed, and the results of new drugs have been repeated as scheduled
The company vigorously promoted scientific and technological innovation, brought in high-level talents from overseas to establish two joint venture research institutes, and set up offshore drug research and development centers abroad. The “Changzhou Qianhong International Biomedical Innovative Drug Incubation Base” was established on this basis, and was included in the “12th Five-Year Plan” national major science and technology project. As of the release of the 2023 report, QHRD107 has entered phase II clinical trials, and 3 innovative drugs are about to enter phase II clinical trials. An additional innovative drug has obtained a clinical trial approval notice, which will provide a strong core competitiveness for the company's subsequent development.
Profit Forecasts and Investment Ratings
2024Q1's profit is growing rapidly. Taking into account factors such as the company's 2024Q1 revenue pressure and the increase in gross margin during the same period, we adjusted the 2024-2025 operating income from 21.66/ 2,493 billion yuan to 1,702 billion yuan, and the 2026 revenue forecast to 2,507 million yuan; the net profit forecast for 2024-2025 was adjusted from 307/400 million yuan to 316.356 million yuan, and the net profit forecast for 2026 was 429 million yuan. Maintain an “Overweight” rating.
Risk warning: The risk of falling product sales prices due to drug collection policies, the risk of falling demand in overseas markets to the heparin business, the risk of increased investment in new drug research and development on profits, the risk of tightening environmental protection policies on operations, risk of product quality risk and increased operating costs.