Incident: On June 20, 2024, the company released its semi-annual performance forecast for 2024. The net profit for the first half of 2024 is expected to be 18,000-250 million yuan, an increase of 330.08%-497.34%; net profit without return to mother is 18,000-250 million yuan, an increase of 318.59% to 481.38% year-on-year. Looking at a single quarter, net profit for Q2 is expected to be 11367-183.67 million yuan, up 445.47%-781.37% year on year; net profit not attributable to mother is 11460-184.6 million yuan, up 484.14% to 840.94% year on year.
Independent selection of products continues to be released, and global demand for peptide raw materials is strong. In 2023, the API business achieved revenue of 416 million yuan, an increase of 141% over the previous year. GLP-1 series APIs, led by simeglutide, rapidly expanded global customers; the performance in the first half of 2024 greatly exceeded expectations, and also benefited from the continued release of independently selected products and an increase in revenue share. The company has established multiple advantages in the field of peptide APIs: 1) Quality advantage: The company has obtained FDA First Approval Letters for APIs such as simeglutide and liraglutide, which can meet the FDA reporting requirements of downstream formulation customers. 2) Production capacity advantage: The 106 workshop peptide API product technical improvement project was successfully put into operation. Equipped with equipment such as industrial robots, fully automatic synthesis systems, fully automatic cracking systems, imported liquid phase preparation production lines, etc., the production capacity of peptide APIs has now reached tonnage scale. 3) Cost advantage: The single batch output of many long-chain modified polypeptide APIs such as simeglutide has reached more than 10 kg, far exceeding the average batch production scale in the industry, and the scale effect continues to show. 4) Sales advantage: Upgrade from a random model to a mapping model, expand sales coverage through a matrix business development team, increase market share, and fully cover the Chinese, European, American and Asia-Pacific markets.
Oseltamivir phosphate granules have obtained marketing approval in China, and the variety of formulations and product specifications continues to be enriched. On June 3, Nootech received the “Drug Registration Certificate” for oseltamivir phosphate granules issued by the State Drug Administration, which is the company's 8th approved formulation product. Oseltamivir phosphate is an influenza virus neuraminidase inhibitor. It is currently the only oral anti-influenza drug with influenza prevention indications, and has been included in authoritative guidelines at home and abroad. In 2023, the company's formulation revenue was 213 million yuan, up 154% year on year. Among them, revenue from antiviral products reached 180 million yuan, up 648% year on year, and gross margin increased to 55%, mainly due to rapid sales volume of oseltamivir phosphate. Currently, the company's oseltamivir phosphate dry suspension is being reviewed and approved by the CDE. By the end of 2024, Nootech Biotech is expected to become the top three domestic owners with full dosage products of oseltamivir, covering all three dosage forms of capsules, granules, and dry suspensions.
Investment advice: Nootech Biotech is a leading company in the peptide segment in China. It has an international standard quality system and large-scale peptide production capacity, and its future performance is expected to continue to grow rapidly. We expect the company's revenue in 2024-2026 to be 16.02/23.03/3.141 billion yuan, up 55.0%/43.8%/36.4% year on year, and net profit to mother of 3.91/5.90/828 million yuan respectively, corresponding PE is 40/26/19 times, maintaining the “recommended” rating.
Risk warning: risk of falling demand, risk of technological innovation, risk of increased industry competition, production risk, exchange rate risk, etc.