Brief performance review
On March 19, 2024, the company released its 2023 annual report. In 2023, the company achieved operating income of 1,825 billion yuan, a year-on-year increase of 70.30%; achieved net profit of 501 million yuan, an increase of 175.98% over the previous year; realized net profit without deduction of 493 million yuan, an increase of 195.86% over the previous year. On a quarterly basis, in the fourth quarter of 2023, the company achieved revenue of 5.81 yuan, an increase of 182.65% over the previous year; achieved net profit of 170 million yuan to the mother, reversed the loss year on year; realized net profit of 168 million yuan after deduction of net profit from mother, reversing the loss year on year.
Management analysis
Deeply cultivate the terminal market and release the shingles vaccine quickly. The company's first domestic shingles vaccine for people aged 40 and above, was approved for marketing in January 2023. Focusing on the positioning and characteristics of this product, the company actively adjusted its sales strategy, formulated detailed market development plans and action plans, and completed the recruitment process at various provincial levels according to the plan, laying a solid foundation for product launch and sales. The company makes full use of in-depth terminal marketing networks and professional and efficient marketing services to enhance brand influence. At the same time, the digital marketing model is beginning to bear fruit, achieving full online and offline coverage. The company's smooth launch of this vaccine broke the situation where domestic shingles prevention products are monopolized by imported vaccines, filled the shortcomings of the domestic shingles vaccine market, provided the public with new choices to prevent shingles, and contributed new profit growth points to the company. In 2023, the company sold 663,500 doses of the shingles vaccine and achieved operating revenue of 883 million yuan, making it the company's highest-grossing vaccine variety.
Research and development of products under development continues to advance, and the company's vaccine pipeline is expected to continue to be rich. The company continues to promote various products under development and industrialization progress at the critical stage of clinical research and industrialization. Among them, the liquid nasal spray influenza vaccine is about to apply for marketing approval; the DPT vaccine (three components) has completed phase I clinical trials and is being prepared for phase III clinical trials; clinical trial applications for tetanus monoclonal antibody and diploid rabies vaccine have been approved, and phase I clinical studies will soon be carried out; adjuvant influenza vaccine, recombinant shingles vaccine, HSV-2 vaccine, and Hib vaccine are scheduled to begin clinical trial registration in 2024. The company's R&D work continues to advance, and it is expected that some companies will continue to enrich their vaccine product lines in the future.
Profit Forecasts, Valuations, and Ratings
We maintain our profit expectations and expect the company to achieve net profit of 6.95 (+39%), 9.12 (+31%), and 1,107 billion yuan (+21%) in 2024-2026, respectively. In 2024-2026, the company's corresponding EPS was 1.68, 2.21, and 2.68 yuan, respectively, and the corresponding current PE was 31, 24, and 20 times, respectively. Maintain an “Overweight” rating.
Risk warning
The risk of sales and promotion of new products falling short of expectations, the risk of increased market competition, the risk that R&D progress falls short of expectations, the risk that promotion of the two-needle method falls short of expectations, and the risk of lifting the ban on restricted stocks.