大输液业务、原料药业务优化以及财务费用减少是公司利润增长的核心原因。分季度看，1Q24/2Q24 公司分别实现收入62.19 亿元/56.08 亿元，同比增长11.0%/9.3%；归母净利润10.26 亿元/7.74 亿元，同比增长26.6%/30.8%。据公司公告，1H24 公司持续加大市场开发，并持续优化输液和非输液制剂的产品结构；原料药中间体主要产品量价齐升，同时通过节能降耗，有效降低生产成本；公司持续优化融资结构，有息负债规模和融资利率下降，财务费用减少，以上原因导致公司净利润同比增加。另据川宁生物业绩预告，1H24 川宁实现归母净利润同比增长86.76%-97.00%。1H24 net profit slightly exceeded our expectations
The company announced the 1H24 performance report: revenue of 11.827 billion yuan, up 9.52% year on year; net profit to mother was 1.8 billion yuan, up 28.24% year on year. Net profit slightly exceeded our expectations. We expect the main API business to grow rapidly.
Development trends
The major infusion business, the optimization of the API business, and the reduction of financial expenses are the core reasons for the company's profit growth. On a quarterly basis, 1Q24/2Q24 achieved revenue of 6.219 billion yuan/5.608 billion yuan, an increase of 11.0%/9.3% year on year; net profit to mother was 1.026 billion yuan/0.774 billion yuan, up 26.6%/30.8% year on year. According to the company's announcement, 1H24 continues to increase market development and continuously optimize the product structure for infusion and non-infusion preparations; the volume and price of the main API intermediate products have risen sharply, while effectively reducing production costs through energy saving; the company continues to optimize the financing structure, the scale of interest-bearing debt and financing interest rates have declined, and financial expenses have decreased. The above reasons have led to a year-on-year increase in the company's net profit. In addition, according to Twining Biotech's performance forecast, 1H24 achieved a year-on-year increase of 86.76%-97.00% in net profit to mother.
The ADC pipeline has entered the harvest period, and we are watching clinical progress at home and abroad. The core product HER2 ADC A166 targets 3L+ HER2+ breast cancer, PD-L monoclonal antibody A167 for 3L+ NPC, and TROP2ADC SKB264 has submitted CDE listing applications for 3L+TNBC. The company expects 2H24-1H25 to be commercialized, and has begun forming a self-operated sales team with Columbite. As of April 25, 2024, MSD has initiated seven key global phase III clinical trials of SKB264, covering NSCLC, breast cancer, gastric cancer, and endometrial cancer. Combined use with K drugs is also being explored. MSD also initiated a global phase 1 clinical trial of Cldn18.2 ADC SKB315 for gastrointestinal tumors.
Profit forecasting and valuation
Due to business growth and clinical progress in various sectors, we raised net profit to mother by 6.5% to 2.884 billion yuan in 2024 and 5.8% to 3.304 billion yuan in 2025. The current stock price corresponds to 2024/2025 17.3/15.1 times the price-earnings ratio. Maintaining an outperforming industry rating, considering the downward shift in the valuation center of the A-share generic drug sector, according to the SOTP valuation method, we maintained a target price of 44.5 yuan, corresponding to a price-earnings ratio of 24.7/21.6 times 2024/2025, with 42.7% upside compared to the current stock price.
risks
Prices of antibiotic intermediates declined; new drug releases fell short of expectations; progress of innovative drugs fell short of expectations
