The impact of collection was unleashed, and the renewal volume and price rose sharply to welcome a new round of growth. As a third-generation domestic leading insulin company, the company has had excellent performance growth over a long period of time. In 2023, the company achieved revenue of 2.61 billion yuan (+52%) and net profit of 340 million yuan to mother, turning a loss into a profit. With the clear impact of the implementation of the first round of national insulin procurement in 2022 and the implementation of the second round of procurement in 2024, the certainty that the company's domestic business will grow over the next 3-year procurement cycle will increase. In this collection contract renewal, the winning volume and price of the company's products rose sharply. The total procurement demand increased by 151% compared to the previous round of collection, and the average price of selected products increased by 31%, and profitability is expected to improve.
Deepen the overseas layout and create a domestic and international dual cycle. In the research pipeline, the company is making the fastest progress in going overseas with third-generation insulin declarations in Europe and the US. The company has promoted an international strategic layout since 2005, and achieved rapid growth with international sales revenue of 327 million yuan (+132%) in 2023. Currently, the company's glycine, laipong, and medon insulin are in the US FDA and European EMA marketing application stage. In terms of marketing in Europe and the US, the company reached a cooperation with overseas biosimilar giant Sandoz AG (Sandoz AG) in 2018. The European and American market space is large and the pattern is excellent. As insulin prices in the US market are adjusted, the company is expected to actually benefit.
The innovative pipeline layout is at the cutting edge, and the iterative product sequence is rich. As an essential final drug for diabetes treatment, insulin has irreplaceable clinical value. The company has maintained innovative high investment in R&D for a long time. The R&D investment and revenue share in the past 3 years is above the industry average. The R&D pipeline mainly revolves around diabetes: GZR18 injection (GLP-1RA weekly preparation), which has completed clinical studies of stage Ic and type 2 diabetes and overweight/obesity in China; GZR101 injection (a new fourth-generation premixed double insulin drug), has completed the first phase II patient administration; GZR4 injection (fourth-generation ultra-long-acting insulin weekly formulation) has achieved phase II First patient administration in a clinical trial.
We are optimistic about the certainty of the growth of the domestic basic market after the company's procurement and contract renewal. The product launch and innovative layout are also expected to save medium- to long-term growth momentum. The company's net profit for 2024-2026 is estimated to be 6.42/11.5/1,444 billion yuan, respectively, and the corresponding EPS is 1.07/1.91/2.40 yuan, respectively. Referring to the average valuation of comparable companies, the company was given 32 times PE in 2025, corresponding to a target price of 61.12 yuan, which covered the “buy” rating for the first time.
Risk warning
Risk of overseas progress falling short of expectations; risk of new product launches falling short of expectations; risk of changes in industry policies; risk of impact on emerging treatments; risk of geopolitical changes, etc.