Financial performance is impressive, and structural health trends are improving
Revenue for the full year of 2022 was 2.34 billion yuan, up 14.4% year on year, gross profit was 1.76 billion yuan, up 15.4% year on year, gross margin was 75.2%, net profit was 683 million yuan, up 15.7% year on year. The company continued to increase R&D investment. The cumulative R&D expenditure in 2022 was 118 million yuan, up 15.1% year on year. R&D expenditure in 2021-2022 accounted for 5.0% of revenue, and R&D investment was stable.
The company continued to increase its marketing efforts. Distribution costs increased 24.5% year-on-year, from 620,000 yuan in 2021 to 772 million yuan in 2022, and the percentage of revenue increased from 30.3% to 33.0%. The company increased the speed and efficiency of the return of accounts receivable. The accounts receivable inventory in 2022 decreased 26.1% year on year, while cash and its equivalents increased by 613 million yuan. The company's operating efficiency has improved. The number of inventory turnover days and receivable turnaround days have been reduced by 1.6/23.8 days respectively, the liquidity ratio has increased by 0.4 to 2.7, and the overall financial structure has developed healthily.
Further advancing medical research, the competitiveness of core products continues to improve, and the imaging sector is accelerating its deployment in the CKD side. The company achieved sales revenue of 1.57 billion yuan through the two core products of uremia removal and kidney moisturizing pellets, an increase of 15.0% over the previous year. Among them, sales revenue of beneficial kidney moisturizing pellets increased 30% year on year. Driven by dual-core products, the company seized market opportunities and successfully covered 32,000 terminal medical institutions and 240,000 pharmacies. In terms of imaging, the company gradually achieved full coverage of its product line (NMR, CT product line) and accelerated its market layout. Overall revenue increased 16.1% to 163 million yuan, covering more than 3,000 terminal medical institutions. The market share of gadolutamine injection steadily rose to third in the country. The comprehensive clinical value was high. Iopanol injections (Kang Lexian) covered 244 hospitals, and revenue increased significantly. Revenue from maternal and child products increased 16.3% year-on-year, with terminal medical institutions covering 15,000 and pharmacies covering 110,000. Through various events and competitions, Yulin Pharmaceutical achieved “online+offline” dual-channel sales, achieving revenue of 359 million yuan, an increase of 15.1% over the previous year.
Self-research and external cooperation formed a research and innovation consortium. R&D progressed smoothly. In 2022, the company focused on developing nephrology and imaging products around the “1+6” product line. Among them, uremia removal has completed evidence-based medical research and systems biology research, and kidney humidification particles have completed evidence-based medical research and projects. The company and the Shenzhen Institute of Advanced Technology of the Chinese Academy of Sciences have jointly set up an “Integrated Joint Laboratory for Ultrasound Microbubble Diagnosis and Treatment” at Hong Kong Invasion University. At the same time, the company joined forces with Mingkangde and Bete Pharmaceutical to ensure the development of new nephrology drugs and imaging products and the supply of APIs. In the MRI and CT series, the consistency evaluation of the contrast agent gadoluamide injection and iodopanol injection has been submitted for registration. Among them, iodopanol injections have been successfully listed in 20 provinces across the country, production approval for iodoxalol injections has been applied for production, and ultrasound microbubble medical imaging comparison agents have completed formulation production verification. It is expected that 2 MRI contrast agents and 2 CT contrast agents will be marketed in 2024-2025. Yulin Pharmaceutical's gold standard bone water has been registered in the US.
Our point of view:
The company has an academic marketing team of about 2,000 people, covering 41,000 hospitals and 400,000 pharmacies. With the “drug+non-drug” e-commerce model of interest, the company achieved a 120% year-on-year increase in online sales. With nephrology as its flagship, the company continues to promote the in-depth development of nephrology and imaging product lines. Maternal and child products have rapidly broken through the volume of products for bone injuries, skin, liver, gallbladder, and digestion. Currently, 67 varieties have entered the 2022 national medical insurance catalogue. The core products have remarkable clinical value. The three major production bases in Guangzhou, Inner Mongolia and Yulin are advancing equipment transformation and upgrading, and forming a layout of four strategic industrial bases that echo the north and south and cover the whole country with the Khorgos base will push the group to form large-scale group operations to reduce costs and increase efficiency. Considering that the domestic CKD prevalence rate is 8.2% and the awareness rate is only 10.0%, there is huge market space and potential to increase penetration. The company's performance continues to grow. PE is only 4.8 times. The value is seriously underestimated. Active attention is recommended.