The operating situation improved marginally, and net profit after deducting non-return to mother reached a record high. As the impact of not winning the bid gradually came to fruition, the company's operating situation improved markedly marginally. In the first three quarters of 2024, the company achieved net profit of 0.515 billion yuan (+16.49%), net profit after deducting non-return to mother of 0.346 billion yuan (+8.80%), and net profit without return to mother reached a record high since listing. The improvement in business conditions mainly benefited from the implementation of cost reduction and efficiency measures such as sales structure and marketing model channel adjustments and inventory optimization, and various businesses developed steadily.
Continuing to improve the construction of sales channels, the release of pharmaceutical products is expected to accelerate. In terms of pharmaceutical sales and promotion, the company continued to improve sales channel construction and entered hundreds of new hospitals in the first half of 2024. At the same time, collection varieties are promoting collection contract renewals and sales in private and broad markets, and the unselected product business is sinking to increase product sales in primary medical institutions. Furthermore, retail and e-commerce continue to make efforts to strengthen the cohesiveness of cooperation with retail pharmacies, innovate e-commerce marketing models, and open up new retail channel networks. Based on the gradual improvement of the company's multi-channel sales system, the release of the company's pharmaceutical products is expected to accelerate.
The API business is deeply involved in fermentation, and the synthetic biology platform has been upgraded. APIs are the company's traditional key business. It is deeply involved in fermentative semi-synthetic characteristic technology, and has created multi-disciplinary technology platforms such as synthetic biology, enzyme engineering, microbial metabolism engineering, and efficient preparation. On November 25, the company held a signing ceremony with Zhejiang University of Technology to jointly establish the Synthetic Biofabrication Innovation Research Institute. The cooperation between the two sides is expected to accelerate the process of synthetic biology technology from front-end R&D to industrialization, and drive industrial transformation and upgrading. In the future, the company will continue to lay out emerging business fields such as health, medical aesthetics, and health products based on synthetic biology technology platforms.
Profit forecast and rating: The company is expected to achieve revenue of 10.383/11.295/12.542 billion yuan in 2024-2026, up 0.1%/8.8%/11.0% year on year; net profit to mother 0.563/0.691/0.829 billion yuan, up 704.4%/22.8%/19.9% year on year; corresponding to 17.8/14.5/12.1 times PE. Maintaining a “buy” rating based on marginal improvements in the company's business conditions and the layout of new synthetic biology businesses.
Risk warning: risk of product price changes, increased risk of market competition, risk of changes in industry policies, risk of changes in raw material prices
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