Brief performance review

On August 29, 2024, the company released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 0.036 billion yuan, -76%; realized net profit of 0.025 billion yuan, or -77% year on year; realized net profit after deduction of 0.021 billion yuan, a year-on-year loss of%; in a single quarter, the company achieved revenue of 0.001 billion yuan, or -73% year on year; achieved net profit return of 0.013 billion yuan Yuan, which turned into a loss year on year; net profit not attributable to mother was deducted - 0.035 billion yuan, and the loss increased 249% year over year.

Management analysis

The batch issuance process is progressing steadily, pending the release of the influenza vaccine. According to the company's announcement, from 2021 to 2023, the company's influenza vaccine was approved and issued in 100 batches, 103 batches and 94 batches respectively, and the number of influenza vaccine batches issued continued to maintain the leading position in the country. The company's influenza vaccine production and batch issuance in the first half of 2024 was earlier than the previous year. As of the end of June 2024, the company issued 66 batches of influenza vaccine. However, since the first half of the year was a low season for influenza vaccine sales, and the bidding and procurement platforms in each province needed to update product prices after the price adjustment of the company's quadrivalent influenza vaccine in June, overall influenza vaccine sales were low in the first half of the year.

Prices of major products are adjusted, and the influenza vaccination rate is expected to increase. According to the company's previous announcement, the company decided to adjust the price of the company's quadrivalent influenza vaccine products starting June 5, 2024: quadrivalent influenza virus lysis vaccine (adult dosage form, prefilled 0.5 ml/tube) to 88 yuan/tube; quadrivalent influenza virus lytic vaccine (adult dosage, 0.5 ml/bottle) to 85 yuan/bottle; and quadrivalent influenza virus lytic vaccine (children's dosage, prefilled 0.25 ml/bottle) to 128 yuan/tube. In the long run, lower prices will help stimulate the increase in demand for the influenza vaccine market, further increase the influenza vaccination rate, expand the market size, and bring market opportunities in exchange for price.

Establish a diverse pipeline of products under development to cultivate new profit growth points. Vaccines developed by the company, such as the adsorbed acell-free 100 (three-component) white burst vaccine and the group A group C meningococcal conjugate vaccine, are undergoing clinical research or registration as planned; in addition, the company is steadily carrying out pre-clinical research and development of freeze-dried haemophilus influenzae type b conjugate vaccine, recombinant herpes zoster vaccine (CHO cells), influenza virus mRNA vaccine, and mRNA respiratory syncytial virus vaccine. The company will continue to promote research and development of new vaccine products and increase new profit growth points.

Profit Forecasts, Valuations, and Ratings

Taking into account factors such as price adjustments for the company's products, we lowered our 24-25 profit forecast. We expect the company to achieve net profit of 5.89 (-32%), 7.31 (+24%), and 0.877 billion yuan (+20%) in 24-26, respectively. In 2023-2025, the company's corresponding EPS was 0.98, 1.22, and 1.46 yuan, respectively, and the corresponding current PE was 18, 15, and 12 times, respectively. Maintain a “buy” rating.

Risk warning

Risk of influenza vaccine sales and promotion falling short of expectations; risk of developing products under development; risk of increased market competition; risk of shareholder holdings reduction.