2024 Interim Report

During the reporting period, the company achieved operating income of 2.763 billion yuan, up 15.13% year on year; net profit attributable to shareholders of listed companies was 0.629 billion yuan, up 15.46% year on year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 0.634 billion yuan, up 16.27% year on year; basic income per share was 0.62 yuan, up 14.81% year on year

The release of core products drives revenue growth, and the impact of collection gradually dissipates

During the reporting period, the company's industrial business achieved revenue of 2.359 billion yuan, a year-on-year increase of 14.51%; commercial pharmaceutical business achieved revenue of 0.359 billion yuan, an increase of 23.64% 6; other trade and labor services achieved operating income of 0.025 billion yuan, a year-on-year decrease of 4.04%; and other businesses achieved revenue of 0.021 billion yuan, a year-on-year decrease of 13.84%. On the product side, the anesthetic series products approved by the company in recent years (oxycodone, remifentanil, sufentanil, oxelidine fumarate injections, and afentanyl, etc.) have achieved rapid growth. During the reporting period, the company achieved revenue of 1.522 billion yuan, up 20.04% year on year, accounting for 55.09% of revenue; psychiatric products achieved operating income of 0.595 billion yuan, up 8.17% year on year, accounting for 21.55% of revenue; neurological products achieved revenue of 0.08 billion yuan, up 8.51% year on year. The company's anesthesia series products were rapidly released. At the same time, with the normalization of collection, psychotropic products gradually dissipated due to the normalization of collection products, driving the company's overall performance to grow rapidly.

Issuing an equity incentive plan to demonstrate confidence in long-term development

On June 13, the company issued an announcement stating that the incentive tool used in the incentive plan is restricted stocks, which are used to implement equity incentive plans or employee stock ownership plans. The number of restricted shares to be granted under the incentive plan is 8.7616 million shares, accounting for approximately 0.8696% of the company's total share capital of 1007.5881 million shares at the time the draft incentive plan was announced. The grant price was 11.51 yuan/share. The total number of incentive recipients was 860, accounting for 15.01% of the company's total 5,729 registered employees. The company has a large number of incentive targets this time, helping the company to further establish a long-term incentive mechanism to attract and retain outstanding talents, motivate core employees, and demonstrate confidence in the company's long-term development.

Increase investment in innovative drug research and development and achieve remarkable R&D results

During the reporting period, the company's R&D expenditure reached 0.319 billion yuan, an increase of 13.03% 6 over the same period last year. Currently, the company has more than 70 research projects, including more than 20 innovative drug projects, 44 key generic drug projects, and 9 development-causality evaluation projects. In the new drug research project, NH600001 emulsion injections completed phase I clinical studies, NHL35700 tablets and YH1910-Z02 injections carried out phase I clinical studies, and NH102 tablets and NH130 tablets completed phase I clinical studies. Among generic drug projects, afentanyl hydrochloride injection (5ml: 2.5mg), lacosamide injections, and pregabalin capsules have been approved for production; 9 projects are under review. 9 consistency evaluation projects were carried out, - 1 compliance evaluation project passed, -... 4 compliance evaluation projects under review. During the reporting period, the company increased investment in new drug research and development, adopted a new drug research and development model combining independent research and development with cooperative research and development to accelerate the innovation system and innovation capacity building, and promote drug research and development.

Investment advice:

We expect the company's 2024-2026 EPS to be 1.24 yuan, 1.49 yuan, and 1.72 yuan, respectively, with corresponding dynamic price-earnings ratios of 19.44 times, 16.15 times, and 13.94 times, respectively. The company is a leading domestic enterprise focusing on the development and production of central nervous system drugs. As the company's new products are released in the future, it is optimistic that the company's performance will grow over a long period of time and maintain its purchase rating.

Risk warning: Risk of drug development falling short of expectations, risk of policy risk, risk of product sales falling short of expectations