Incident: The company released its 2024 semi-annual performance forecast, which is expected to achieve net profit of 0.183 billion yuan, +53.57% year over year; deducted non-net profit of 0.179 billion yuan, +60.64% year over year. The results are in line with market expectations.
Comment:
Heparin API's gross margin rebounded, leading to a high year-on-year increase in net profit. In 24Q2, the company's net profit for the single quarter is expected to be 78.68 million yuan, which is expected to be +137.87% year over year; net profit after deducting non-net profit is estimated to be 77.48 million yuan, which is expected to be +196.88% year over year. 24H1's net profit to mother increased year-on-year, mainly due to a sharp year-on-year increase in gross margin and a gradual decline in sales expenses. 24Q1's gross profit margin for heparin APIs was 38%, a significant year-on-year improvement; we judge that the company's 24H1 gross margin increased year-on-year, mainly due to the continued high level of heparin API gross margin in 24Q2.
The Qianmu project progressed smoothly, creating the long-term advantages of heparin raw materials. The Henan Qianmu project has progressed smoothly since construction in October 2023. It is scheduled to be put into operation by the end of 24, and is expected to contribute to performance in '25. After the Qianmu project is put into operation, the company will cooperate deeply with Muyuan to create advantages in the entire industry chain from pig breeding, slaughter, heparin crude products, heparin raw products, heparin raw materials and formulation products, and plans to rely on leading traceability high-quality pig small intestine resources to enter the supply chain of high-end international customers to provide sales growth for the company to develop the high-end heparin API market in the future.
The CDK9 inhibitor program is applying for a breakthrough therapy and is looking forward to the implementation of innovative transformation. As of late April 2024, QHRD107 (CDK9 kinase inhibitor, indicated for recurrent acute myeloid leukemia) has completed phase IIa clinical climbing trial and has remarkable curative effects. It aims to apply for breakthrough therapy after phase II, and is expected to make phased progress by the end of 24; in addition, QHRD106 has conducted phase II clinical protocol discussions and was approved by CDE without reservation, and QHRD110 has completed phase I clinical bridging tests in China, and QHRD211 has completed phase I clinical trials and entered phase II clinical. The company's continuous promotion of innovative pharmaceutical products will continue to inject new momentum into long-term development. We look forward to the phased progress of the company's CDK9 inhibitors by the end of '24.
Profit forecasting, valuation and ratings: Considering that the company's competitive advantage in the heparin field is expected to continue to increase, innovative drug development is expected to bring new growth space, maintaining the forecast net profit of 0.308/0.368/0.421 billion yuan from 2024 to 2026, an increase of 69.09%/19.62%/14.34% year-on-year. The PE corresponding to the current stock price is 23/19/17 times, respectively, maintaining a “buy” rating.
Risk warning: risk of heparin price cycle fluctuations; risk of innovative drug development falling short of expectations.