Event: The company publishes its 2024 mid-year report.
In 24H1, the company achieved revenue of 1.496 billion yuan, a year-on-year increase of 47.77%; net profit to mother of 0.553 billion yuan, an increase of 99.1% year-on-year; net profit after deducting non-return to mother of 0.526 billion yuan, an increase of 99.99% year-on-year.
In 24Q2, the company achieved revenue of 0.751 billion yuan, up 70.91% year on year, up about 1% month on month; net profit to mother 0.268 billion yuan, up 230.6% year on year; net profit after deducting 0.255 billion yuan, up 248.3% year on year; gross profit margin 82.37%, up 1.65 pct year on year, up 3.69 pct month on month; net profit margin of 35.52%, 17.33 pct year on year, down 2.63 pct month on month. The increase in gross margin is estimated to be related to the increase in the company's share of sales of high-end model products, and the reason for the month-on-month decrease in net profit margin is mainly due to the company's continuous strengthening of academic promotion of innovative technology.
The nephropathy line actively reduces prices, increases coverage and frequency of treatment, and benefits more patients.
According to the company's announcement, the company's nephrology products have now covered more than 6,000 level-II and above hospitals across the country. In 24H1, sales revenue of nephrology hemoperfusion products (i.e. HA series, KHA series, pHA series) increased 84% year-on-year. By model: (1) HA130: In order to support national medical reform and reduce financial pressure on patients, the company took the initiative to reduce the terminal price of the HA130 blood perfusion device by 26%. In the first half of the year, HA130 sales revenue increased 67% year on year, sales expenditure increased 127% year on year, and patient coverage and frequency of treatment were further improved. (2) KHA series: Based on the HA series, the effective adsorption rate is further improved by upgrading and iterating on the basis of the HA series. At present, KHA series products have covered more than 500 hospitals, and 24H1 sales revenue has increased 180% year on year. (3) pHA series:
The world's first product that can simultaneously and efficiently adsorb and remove macromolecular toxins and protein-binding toxins from uremia patients. It was officially launched and sold in November 2023. Up to now, it has been promoted and used in more than 60 clinical hospitals.
The liver disease and critical illness line began to be rapidly released, and the second and third growth curves formed.
(1) Liver disease: At present, the company's related products in the field of liver disease have covered more than 2000 hospitals.
In 24H1, sales revenue of hepatology products (i.e. bilirubin adsorbers, HA330-II, plasma separators) increased 112% year over year. The company is promoting dual plasma molecular adsorption systems (DPMAS) on an ad hoc basis, and has established a central artificial liver benchmarking center nationwide, fully covering the entire field of liver disease and clinical frontline: 1) The disposable plasma separator independently developed and produced by the company obtained a new product registration certificate in December 2023. Up to now, it has completed networking work in 18 provinces/cities.
The CA280 single-use cytokine adsorption column explores new treatment strategies in the treatment of patients with liver failure and sepsis, and has now been promoted and applied in more than 60 hospitals. 2) Several recent DPMAS research results were shared on posters at the 2024 Asia Pacific Liver Disease Annual Meeting (APASL), which demonstrated the safety, efficacy and therapeutic advantages of the company's products in various major dimensions. 3) The second phase of the China Liver Failure Blood Purification Diagnosis and Treatment (Cruise) Project was officially launched. Up to now, 170 clinical units have participated.
(2) In the field of critical care and emergency care: At present, the company's emergency and critical care products have covered more than 1,600 hospitals. In 24H1, the company's sales revenue for consumables related to the critical care field (HA330, HA380, CA series cytokine adsorption columns) increased 72% year-on-year. Among them, the CA series cytokine adsorption column (the first domestic product to remove cytokine levels represented by IL-6 from sepsis patients) independently developed and produced by the company has been used in more than 100 hospitals. In recent years, the company has increased the promotion and application of blood adsorption technology in the field of severe illness to enhance clinical recognition and application.
Investment advice:
Buy-A investment rating, 6-month target price of 40.1 yuan. On March 17, 2024, we released the company's in-depth report “Jianfan Biotech's In-depth Recommendation: The Road to Thorns Is Over, the Road to Blossoming”. Currently, the company's fundamental improvements and bottom reversal logic continue to be implemented. The company's revenue growth rates from 2024 to 2026 are expected to be 108.5%, 33.6%, and 31.9%, respectively. The growth rate of net profit is 147.2%, 32.4%, and 30.0%, respectively. The growth rate is outstanding; maintaining the investment rating given to Buy-A, with a 6-month target price of 40.1 yuan, which is equivalent to 2024 30X dynamic price-earnings ratio.
Risk warning: Uncertainty in medical policies; uncertainty about the company's subsequent orders; uncertainty about increasing penetration rate and treatment frequency.