Announcement: In 2023, the company's revenue was 7.384 billion yuan, up 4.21% year-on-year. On the business development side, the company added a net contract amount of 7.85 billion yuan in 2023, a year-on-year decrease of 18.8%. Net profit attributable to mother was RMB 2,025 million, up 0.91% year on year; net profit after deducting non-return to mother was RMB 1,477 billion, down 4.05% year on year. In the fourth quarter of 2023, the company's revenue was 1,734 billion yuan, up 3.22% year on year, and net profit due to mother was 1.45, down 63.86% year on year, after deducting non-net profit of 279 million yuan, down 19.74% year on year.
The company's main business includes two major segments: clinical trial technical services and clinical trial-related services and laboratory services: (1) Clinical trial technical services: revenue of 4.168 billion yuan, an increase of 1.04% over the previous year. The gross profit of clinical trial technical services was 1,592 billion yuan, up 2.59% year on year; gross margin increased to 38.21% from 37.63% in 2022. As of December 31, 2023, the company's ongoing pharmacological clinical research projects increased from 680 projects on December 31, 2022 to 752 projects, including 330 clinical phase I (including pharmacokinetic studies) projects; 136 clinical phase II projects; 171 clinical phase III projects; 31 clinical phase IV projects; and 84 other projects (mainly including researcher-initiated research and real-world research). As of December 31, 2023, the company has 499 drug clinical research projects carried out domestically and 253 overseas; (2) Clinical trial-related services and laboratory services:
Revenue was $3.121 billion, up 8.51% year over year. The gross profit of clinical trial-related services and laboratory services was $1,191 million, which was basically the same as the previous year; gross margin fell to 38.16% from 41.76% in 2022. Among them (i) Data management and statistical analysis services: In 2023, the number of the company's global customers increased from 259 at the end of 2022 to 340, an increase of 31.27% over the previous year. By the end of 2023, the company had completed 306 projects, with 826 ongoing projects, of which 499 projects were executed and implemented by domestic teams, and 327 projects were executed and implemented by overseas teams. (ii) Site management services: By the end of 2023, the company's on-site management team had completed 273 projects, and the number of ongoing field projects increased from 1,621 at the end of 2022 to 1952. (iii) Imaging evaluation services: By the end of 2023, the company had provided impact assessment services for more than 280 clinical trial projects, helped launch 25 products, and were inspected by the National Bureau of more than 20 centers throughout the year. (iv) In terms of mergers and acquisitions and production capacity: In 2023, Fangda Pharmaceutical's US laboratory completed the acquisition of Nucro-Technics Holdings, Inc. and its subsidiary Nucro-Technics, Inc., thereby expanding the laboratory by more than 5574 square meters; a new clinical sample production center of more than 8,000 square meters in Suzhou was put into operation.
The company will continue to embrace regulatory changes, technological innovation and global expansion, and continue to improve and build an integrated R&D service platform. In 2023, the company added 7.85 billion new contracts on the business development side, down 18.8% year on year, mainly due to factors such as cancellation of orders by some customers and a sharp drop in handling fees for new orders; the cumulative contract amount to be executed by the end of 2023 was 14.08 billion yuan, an increase of 2.1% year on year; in 2023, the company served the research and development of 22 new Class 1 drugs already marketed in China, and the R&D of 6 innovative medical devices already marketed in China. In 2023, the company increased its investment in emerging businesses and technologies and the construction of an ecosystem to meet customer demand for the company's emerging services, continuously expand the customers of multinational pharmaceutical companies and large domestic pharmaceutical companies, enhance business and operational capabilities in the US and Europe through acquisitions and mergers and acquisitions, further increase global market share, and achieve long-term performance growth and development.
Investment advice: Tiger Pharmaceuticals is in a highly prosperous CRO industry. The company continues to improve the layout and extension of the industrial chain to build an international multi-center clinical platform, and is expected to continue to maintain high growth. We expect EPS in 2024-2026 to be 2.62, 3.03, and 3.54 yuan respectively. Referring to comparable company estimates, we will give it 25-30 times PE in 2024, with a reasonable value range of 65.50-78.60 yuan, maintaining a “superior to market” rating.
Risk warning: Industry competition intensifies; pharmaceutical companies' R&D demand declines; business expansion falls short of expectations; investment returns are affected by market fluctuations.