2024H1's revenue grew steadily, and the profit side growth rate was obvious. Profitability increased rapidly. The company achieved operating income of 0.238 billion yuan, an increase of 28.59% year on year; net profit to mother was 0.047 billion yuan, up 52.91% year on year; net profit after deducting non-return to mother was 0.046 billion yuan, up 55.08% year on year. Excluding the impact of the Yuanye Biotech merger, operating income increased 11.51% year on year, and net profit increased 33.68% year on year. Looking at 2024 Q2 alone, the company achieved operating income of 0.14 billion yuan, up 41.55% year on year and 42.17% month on month; net profit to mother 0.03 billion yuan, up 120.77% year on year, up 76.31% month on month; net profit without return to mother 0.029 billion yuan, up 134.90% year on year and 75.41% month on month. The company's revenue side grew steadily year on year, and the results of cost reduction and efficiency were remarkable, and profitability improved rapidly. At the same time, the company insists on independent research and development to expand its product line, and continuously strengthens channel-side construction, which is expected to open up room for future growth. We maintain our profit forecast for 2024-2026. We expect net profit to be 0.111/0.137/0.165 billion yuan, EPS 0.40/0.49/0.59 yuan, and the P/E corresponding to the current stock price is 25.0/20.3/16.8 times, respectively. Given that the company's integrated “R&D, production and marketing” construction highlights its core competitiveness, we maintain a “buy” rating.
The company achieved remarkable results in reducing costs and increasing efficiency. Thanks to the implementation of cost reduction and efficiency measures, the company's profitability was greatly increased in the first half of 2024. 2024H1 2024H1's comprehensive gross profit margin was 63.81%, up 4.31 percentage points year on year, and net sales margin was 22.28%, up 5.61 percentage points year on year. In the first half of 2024, the company's sales/management/R&D/finance expenses ratio was 8.57%/14.27%/12.70%/0.45%, respectively, +0.37/-2.62/-1.51/+0.29 percentage points year-on-year. Looking at 2024Q2 alone, the company's sales/management/R&D/finance expense ratios were 8.52%/12.95%/11.57%/0.46%, respectively, -0.13/-3.20/-2.74/+0.03 percentage points year-on-year.
2024Q2 also stated that Yuanye Biotech increased the company's revenue and profit. Yuanye Biotech, a holding subsidiary, was included in the scope of the company merger starting 2024Q2, helping the company's financial indicators grow. 2024H1 Yuanye Biotech contributed 31.6816 million yuan to consolidated revenue and 5.9448 million yuan to net profit attributable to the parent company. Yuanye Biotech and the company can form synergetic effects on customers, channels and brands, which helps enhance the company's product abundance and market influence.
Risk warning: Risks such as exchange rate fluctuations, declining market demand for drug development services, and fluctuations in return on investment.