Incidents:

The company released its 2024 semi-annual report. 2024H1 achieved revenue and net profit to mother of 5929 billion yuan and 1,047 million yuan respectively, up 1.46% and 6.28% year-on-year respectively.

Thanks to the steady development of the infusion business and specialty business, the company's performance grew steadily:

On the revenue side, 2024H1 achieved revenue of 5.929 billion yuan, an increase of 1.46% year over year. Among them, chronic disease platforms, specialty platforms, infusion platforms, and APIs achieved revenue of 1.678 billion yuan (+3.89%), 1.367 billion yuan (+10.72%), 1.717 billion yuan (+2.88%), and 0.684 billion yuan (-8.42%), respectively.

On the profit side, 2024H1 achieved net profit of 1.047 billion yuan to mother, an increase of 6.28% over the previous year.

Thanks to the steady development of the infusion business and specialty business, the company's performance grew steadily.

Actively expand therapeutic and nutritional infusion products and promote the steady development of the infusion business:

2024H1's infusion business achieved revenue of 1.717 billion yuan, an increase of 2.88% year over year. Among them, revenue from basic infusions increased 9% year on year, and the market share of basic infusions is expected to increase further. In order to promote the continued steady development of the infusion business, the company is actively expanding therapeutic and nutritional infusion products. Varieties such as propofol medium/long chain fat emulsion injections and levofloxacin sodium chloride injections are expected to be released stably.

A number of core varieties continue to be expanded to promote steady growth in the specialty business,:

2024H1's specialty business achieved revenue of 1.367 billion yuan, up 10.72% year over year. Among them, revenue from pediatric medication remained flat, with revenue from nephrology, psychiatry/neurological, oncology, and women's health increasing by 14%, 6%, 75%, and 12%, respectively. Currently, core products such as pregabalin, tenibutin, busulfan, and the Yuting series continue to be released (2024H1 revenue increased by 45%, 73%, 100%, and 33%, respectively), driving steady growth in the specialty business.

Investment advice:

The company's net profit from 2024 to 2026 is estimated to be 1.723 billion yuan, 1.899 billion yuan, and 2.038 billion yuan, respectively, up 29.3%, 10.2%, and 7.4% year-on-year; EPS is expected to be 1.66 yuan/share in 2024, 15 times the current PE, corresponding to a 6-month target price of 24.90 yuan/share, giving a buy-A investment rating.

Risk warning: R&D progress falls short of expectations; sales of products on sale fall short of expectations; drug price cuts exceed expectations, etc.