Brief comment on performance

On October 27, 2023, the company released a report on the third quarter of 2023, showing that in the first three quarters of 2023, the company realized operating income of 1.718 billion yuan, an increase of 10.15% over the same period last year, a net profit of 630 million yuan, an increase of 24.77% over the same period last year, and a net profit of 555 million yuan, an increase of 22.20% over the same period last year. In a single quarter, the company achieved operating income of 1.569 billion yuan in the third quarter of 2023, an increase of 214.16% over the same period last year, a net profit of 521 million yuan, an increase of 152.51%, and a non-return net profit of 497 million yuan, an increase of 164.03%.

Business analysis

The batch and issuance work has progressed steadily, and the influenza vaccine has been released on schedule. The company occupies a leading position in the field of research and development, production and sales of influenza vaccine. at present, it has six original influenza vaccine production workshops with an annual production capacity of 100 million doses of tetravalent influenza vaccine. in recent years, the number of tetravalent influenza vaccines and influenza vaccine batches has continued to maintain a leading position in China. The company obtained three batches of tetravalent influenza vaccine at the end of June 2023, becoming the first enterprise to obtain the issuance of influenza vaccine. According to the data of the Central people's Procuratorate, by the end of the third quarter, 88 batches of tetravalent influenza vaccine had been issued, ranking first among domestic enterprises.

The proportion of influenza-like cases continues to be higher than that of the same period in previous years, so it is recommended to pay continuous attention to the release of influenza vaccine.

According to the latest Influenza Weekly report of China Disease Control and Prevention, in the 42nd week of 2023 (October 16, 2023-October 22, 2023), 63 outbreaks of influenza-like cases were reported nationwide, including 42 cases of subtype A (H3N2), 1 case of subtype A (not shown) and 4 cases of B (Victoria). In addition, in the 42nd week, the ILI% reported by sentinel hospitals in southern provinces was 5.4%, higher than the level of the previous week (4.7%) and higher than that of the same period in 2020-2022 (3.1%, 3.0% and 3.1%). The ILI% reported by sentinel hospitals in northern provinces was 3.2%, higher than the level of the previous week (2.9%) and higher than that of the same period in 2020-2022 (2.2%, 2.3% and 2.8%).

According to the Technical Guide for Influenza vaccination in China issued by the Chinese Centers for Disease Control and Prevention (2023-2024), influenza vaccine is safe and effective, and annual influenza vaccination is the most cost-effective measure to prevent influenza. It is recommended that all people aged 6 months with no taboos of ≥ should be vaccinated against influenza. At present, the proportion of influenza-like cases in southern provinces continues to rise, it is recommended to continue to pay attention to the follow-up release of influenza vaccine.

Earnings forecast, valuation and rating

We maintain our profit forecast for 2023-2025, and expect the company to achieve a net profit of 9.54 (+ 84%), 12.5 (+ 30) and 1.56 billion yuan (+ 25) respectively. From 2023 to 2025, the corresponding EPS of the company was 1.59,2.08,2.59 yuan respectively, and the corresponding pre-PE was 18,14,11 times respectively. Maintain a "buy" rating.

Risk hint

The risk of influenza vaccine sales and promotion is not as expected; the risk of research and development of products under development; the risk of intensified market competition; the risk of shareholder reduction.