Incidents:
On July 10, Pailin Biotech announced its 2024 semi-annual performance forecast. The company achieved net profit of 314.9 million yuan to 343.53 million yuan in the first half of the year, up 120%-140% year on year. The increase in performance was mainly due to strong sales demand in the blood products market, and raw plasma collection increased year-on-year. The number and sales volume of the company's saleable products increased in the first half of 2024, and the main business revenue increased over the same period last year.
Q2 achieved high year-over-year and month-on-month growth in a single quarter:
Combined with the company's disclosure of 2024H1 net profit of 314.9 million yuan to 343.53 million yuan and net profit of 24Q1 and 23Q2 in a single quarter of 121.95 million yuan and 86.76 million yuan, the company's 24Q2 net profit to mother is expected to be 192.95-221.58 million yuan. Compared with 23Q2, the year-on-year growth rate is expected to be 122.40%-155.39%. Compared with 24Q1, the year-on-month growth rate is expected to be 58.22% - 81.70%
The company's Q2 results achieved rapid year-over-year and month-on-month growth. The company's pulping volume for the full year of 2023 was about 1,200 tons, laying a good foundation for product-side release in 2024. Product-side demand remained strong to ensure continued good growth in performance.
Pulp stations have been tested and mined one after another, and the pulping side is expected to continue to grow well:
In the first half of this year, Pacifico's Baiquan Pulp Station and Yi'an Pulp Station completed inspection and official mining in March and April. The remaining 2 pulping stations are expected to complete inspection in the near future. All 19 Pasfique pulping stations are expected to land for mining this year, and Pasfique's pulp harvesting terminal is expected to enter a stage of rapid growth in the next few years. Shuanglin signed a supplementary agreement with Deyuan in March of this year. The two sides once again extended the two-year pulp supply cycle. At the same time, Deyuan's pulp supply was adjusted from no less than 180 tons/year to 200 tons/year, and a stepped reward mechanism was implemented for the supply of more than 500 tons and 600 tons. It is expected that Deyuan's enthusiasm for supplying pulp will increase. Based on the above, we believe that the company will collect more than 1,400 tons of pulp in 2024 with a high degree of certainty.
After Shaanxi Coal Holdings, the company improved quality and efficiency, and the expansion of the new pulp station is worth looking forward to:
After Shaanxi Coal Holdings, the company's various developments progressed smoothly, and it had a high degree of execution and fulfillment.
In terms of products, Shuanglin Biotech's 10% high-purity isopropyl has been clinically approved, and Pacifico's pre-clinical research and development of high-purity isopropyl is progressing rapidly. In terms of overseas travel, in March of this year, Shuanglin signed an exclusive license and supply agreement with the Pakistani distributor 3A Diagnostics, and Jingbing made positive progress overseas. The advancement of the research pipeline and the expansion of overseas markets have laid a solid foundation for the long-term steady growth of the company's performance. At the same time, Shaanxi Coal Group is also expected to be empowered in expanding new pulp stations to help the company obtain more pulp station resources.
Investment advice:
We expect the company's 2024-2026 net profit to be 0.78/0.94/1.1 billion yuan, respectively, and the corresponding EPS is 1.07/1.29/1.50 yuan, respectively. The PE corresponding to the current stock price is 26.03/21.62/18.55 times, respectively. We continue to recommend and give a “buy” rating.
Risk warning:
The amount of pulp collected falls short of the expected risk; the risk of product sales falling short of the expected risk; the launch of a new product falls short of the expected risk.