Incident: The company announced the 2024 employee stock ownership plan (draft): the total amount of capital to be raised will not exceed RMB 37.086.8 million, with “shares” as the subscription unit, with each share being 1.00 yuan, and the maximum number of shares is 37.086.8 million shares. The source of shares is the company's A share common stock purchased by the company from the company's special securities account, accounting for about 0.65% of the company's current total share capital. The total number of employees to participate does not exceed 46 (excluding reserved grantees), including a total of 7 company directors (excluding independent directors), supervisors, and senior management. For the first time, the shareholding plan was granted for the three fiscal years 2024-2026. The assessment indicators include operating income and innovative drug development progress. Among them, the target value for the third unlocking period is 2024-2026, accumulating no less than 6 new drug INDs and completing 2 NDAs, or initiating no less than 8 phase II/III clinical trials. The introduction of the employee stock ownership plan reflects the company's confidence in long-term development, innovation and transformation, which is conducive to mobilizing the enthusiasm of core management and key employees and enhancing the company's core competitiveness.
The main business has been developing steadily over a long period of time. According to the company's 2023 annual report, in terms of proprietary Chinese medicines, core products such as compound thrombotron and brain embolization capsules continue to expand in the field of chronic diseases. The company is actively participating in the collection of national or local alliances, and is also actively promoting the construction of smart workshops and public relations for the resumption of production of dormant products. In terms of chemical generic drugs, a good product echelon has also been formed.
Innovative drugs have entered the harvest period. According to the company's 2023 annual report, the company's first innovative drug, liritvir tablets, has been included in the 2023 national health insurance; the marketing application for onradivir tablets to treat influenza A has been accepted by the NMPA; ZSP1601 is the first domestic small-molecule drug approved for clinical treatment of NASH and is in phase IIb; RAY1225 is a long-acting GLP-1, which has high stimulatory activity on both GLP-1 and GIP receptors. The treatment of type 2 diabetes and overweight/obese patients in China is progressing at an accelerated pace. ZSP1603 treatment for idiopathic pulmonary fibrosis is stage IB/IIa in China.
Profit forecasting and investment advice. The company's 2024-2026 EPS is expected to be 0.43, 0.51, and 0.60 yuan/share respectively. We continue to be optimistic about the long-term stability of the company's core business and the efficient progress in developing new drugs. Referring to comparable companies, the company was given 45x PE for 24 years, with a reasonable value of 19.50 yuan/share, maintaining a “buy” rating.
Risk warning. The price reduction for collection exceeded expectations, pipeline progress fell short of expectations, and product volume fell short of expectations.