持续丰富产品矩阵，关注新产品落地节奏。报告期内，公司新产品1,3-丙二醇、丁二酸、苹果酸、色氨酸、精氨酸开始陆续按计划投入生产，产品矩阵持续丰富。依靠在行业内的标杆效应，华恒生物目前已在化工、医药及保健品、食品添加剂、动物营养等众多下游市场积累了一批优质客户资源，为1,3-丙二醇、丁二酸、苹果酸、色氨酸、精氨酸的市场推广奠定了良好基础。随着上述新产品投向市场，公司客户结构将进一步升级，综合竞争能力亦将逐步增强，为持续成长打下基础。Huaheng Biotech announced its 2024 interim results. In the first half of 2024, the company's revenue was 1.02 billion yuan, +19.6% year on year; net profit to mother was 0.15 billion yuan, -21.7% year on year; net profit after deducting non-return to mother was 0.15 billion yuan, or -22.1% year over year.
In a single quarter of 2024Q2, the company's revenue was 0.52 billion yuan, +14.6% YoY, +2.9%; net profit to mother was 0.06 billion yuan, -42.6% YoY, -27.1% YoY; net profit of 0.06 billion yuan after deducting non-return to mother was 0.06 billion yuan, -44.6% YoY and -28.3% YoY.
24Q2's net profit margin declined in a single quarter due to gross margin and sales expense ratios. Huaheng Biotech's revenue continued to grow in the first half of 2024 and Q2, and profit declined year-on-year. 2024Q2's net profit margin for the single quarter was 12.2%, down 12.2 percentage points from the same period last year and 5 percentage points from the first quarter. The main reason is that the company's gross margin for the 2024Q2 single quarter was 29.7% due to fluctuations in product prices, down 14.9 percentage points from the same period last year, and 3.9 percentage points compared to the first quarter. In terms of cost ratio, the company's 2024Q2 sales expense ratio was 4.0%, an increase of 0.4 percentage points compared with the same period last year and an increase of 1.8 percentage points compared to the first quarter; the management expense ratio was 6.7%, and the R&D expense ratio was 6.8%, all of which remained stable from month to month.
Continue to enrich the product matrix and pay attention to the pace of new product implementation. During the reporting period, the company's new products 1,3-propanediol, succinic acid, malic acid, tryptophan, and arginine began to be put into production one after another as planned, and the product matrix continued to be rich. Relying on the benchmark effect in the industry, Huaheng Biotech has now accumulated a number of high-quality customer resources in many downstream markets such as chemicals, pharmaceuticals and health products, food additives, animal nutrition, etc., laying a good foundation for the marketing of 1,3-propanediol, succinic acid, malic acid, tryptophan, and arginine. As these new products enter the market, the company's customer structure will be further upgraded, and its overall competitiveness will gradually be enhanced, laying the foundation for continued growth.
Maintain a “Highly Recommended” investment rating. We are optimistic about Huaheng Biotech's leading position in the field of synthetic biology. It is expected that with the gradual release of new products, Huaheng Biotech will usher in sustainable growth. Considering changes in the prices of the company's main products, we predict that Huaheng Biotech's net profit for 2024-2026 will be 0.51 billion yuan, 0.74 billion yuan, and 0.96 billion yuan, respectively, +12%, 47%, and 30%. The corresponding PE is 15x, 10x, and 8x, respectively, maintaining a “highly recommended” investment rating.
Risk warning: Risk of product prices falling short of expectations, increased risk of competition, risk of new product delivery falling short of expectations, risk of downstream customer expansion falling short of expectations.