Key points of investment:
The company released its 2024 semi-annual report
2024H1: Achieved revenue of 6.28 billion yuan, down 6.1% year on year, net profit of 1.17 billion yuan, up 3.2% year on year, net profit after deducting 1.16 billion yuan, up 5.7% year on year; 2024Q2: achieved revenue of 3.04 billion yuan, down 7.2% year on year, net profit to mother 0.56 billion yuan, up 1.9% year on year, net profit of 0.57 billion yuan year on year, up 7.9% year on year after deducting net profit of 0.57 billion yuan year on year;? Profitability has improved significantly, and cost rate control is better
2024H1: The company's overall gross profit margin was 66%, up 1.9 pct year on year; the overall cost ratio decreased by 3 pcts, of which: sales expenses ratio was 27.7%, down 1.7 pct year on year, management expense ratio was 5.3%, up 0.6 pct year on year, R&D expenses rate was 7.8%, down 1.3 pct year on year, financial expenses ratio was -1.2%, down 0.6 pct year on year;
2024Q2: The company's overall gross profit margin was 67.3%, up 2.2 pct year on year; overall expenses decreased by 3.1 pct, of which: sales expenses ratio was 28.4%, down 2.2 pct year on year, management expenses rate was 4.6%, down 0.4 pct year on year, R&D expenses rate was 8.3%, down 0.8 pct year on year, financial expenses ratio was -0.8%, up 0.2 pct year on year.
Diagnostic reagents performed well. The chemical preparations and traditional Chinese medicine business were under pressure in the short term, and the company's overall revenue was 6.28 billion yuan, of which: 1) chemical preparations: revenue of 3.22 billion, down 7.3% year on year, gross margin was 81.2%, up 2.3 pct year on year; 2) API and intermediates: revenue of 1.76 billion yuan, down 1.2% year on year, gross margin was 37.1%, up 0.5 pct year on year; 3) Traditional Chinese medicine: revenue 0.75 billion, down 21.00 year on year. Gross margin was 75.6%, up 7.1 pct year on year; 4) Biological products: revenue 0.09 billion yuan, down 22.8% year on year; 5) Diagnostic reagents:
Revenue rose 32.3% to 0.39 billion yuan.
The company has a rich research pipeline, continues to increase BD efforts, and has strong long-term growth momentum. The company focuses on steadily advancing research varieties: 1) injectable ariprazole microspheres (1 month of sustained release): declared for production in 2023, and has now completed on-site inspection and clinical verification of pharmacy registration, received supplementary notices and related research; 2) Simeglutide injection: Indications for type II diabetes have been reported for production, technical review; weight loss indications have obtained clinical approval and are being prepared for phase III clinical trials; 3) recombinant anti-human IL-17A/F humanization Monoclonal Antibody Injection: In The Psoriatic Indication Phase III clinical trial was officially launched in August 2023. The enrollment of all subjects was completed at the end of April 2024, and ankylosing spondylitis indications (jointly declared with Beijing Xinkanghe Biomedical Technology Co., Ltd.) also completed the enrollment of all Phase III clinical subjects in early July 2024.
Continue to increase BD efforts: The company has successively introduced innovative DHODH inhibitors in the anti-infective field, innovative PDE5 inhibitors in the andrology field, and KCNQ2/3, an innovative neuropsychiatric drug. It is expected that it will continue to increase BD efforts in the future.
Profit forecasting and investment advice
We expect the company's 2024-2026 net profit to be 2.2/2.52/2.82 billion yuan, respectively (maintaining the previous forecast), up 13%/14%/12% year over year, corresponding PE is 15/13/12 times, respectively, maintaining the “buy” rating.
Risk warning
Risk of industry policy changes, risk of product price reduction, risk of new drug development