Revenue in 2023 was basically the same year on year, and after deducting non-net profit increased 60% year over year
The company announced that it achieved revenue of 8.67 billion yuan in 2023 (+0.4% yoy after adjustment), net profit of 1.07 billion yuan (adjusted +505% yoy, mainly due to large fluctuations in fair value profit and loss during the same period in '22), and net profit of 1.18 billion yuan (adjusted +60% yoy), mainly due to revenue growth in the Chinese medicine sector and a decrease in impairment accrual, which is in line with the performance forecast (1.16 to 1.28 billion yuan). We expect the company's net profit for 2024-26 to be 11.8/13.1/1.46 billion yuan (+10%/+11% yoy). Considering that the company is one of the leaders in modern traditional Chinese medicine, and catalysts such as the 24-year Dandi AMS US declaration and base drug catalogue update, the 2024 PE valuation is 22 times (Wind's consistent expectation is 16x the average value of the company), and the target price is 17.30 yuan to maintain “increase in holdings”.
Traditional Chinese medicine: Steady growth in 23 years, and is expected to continue growing in 2023, Chinese medicine business revenue increased 6.6% year on year, and gross margin increased 2.4 pct year on year. We expect the profit side growth rate to be significantly higher than the revenue side. We expect steady revenue growth in the Chinese medicine business in 2024:
1) We estimate single-digit revenue growth in 2023, and we expect sales to grow steadily from 24 to 25; 2) Sales of Qishenyi Qiliqi tablets, serum brain pellets, and serum brain pills will grow at 8%/1%/11.5% in 2023, respectively, and are expected to continue the growth trend in 2024; 3) Salvia polyphenolic acid and Yiqi Fumai are expected to achieve rapid revenue growth in 2023, and marginal improvement in the competitive landscape and diagnosis, treatment and repair are expected to drive rapid growth in 24; 4) High speed growth in cold medicine is expected to drive rapid growth in 24 years; 4) Rapid growth in cold medicine is expected to drive rapid growth in 24 years; Growth, 4Q23 causes The high cardinality effect is expected to decline.
Marginal recovery after chemical drugs bottomed out, and biopharmaceutical revenue declined
1) Chemical pharmaceuticals revenue of 1.2 billion yuan (-5% yoy) in 2023. We expect chemical pharmaceuticals to bottom out in 2023, and revenue is expected to return to positive growth in 2024: the chemical sector 3Q23 confirms the inflection point in revenue (3Q23/4Q23 revenue +2%/0%), the impact of mainly tiqing harvesting is clear, and the rapid growth contribution of good water, minodronic acid, etc. has increased. Multiple pipelines have entered the reporting stage, which is expected to drive the chemical sector to resume growth; 2) Biopharmaceuticals revenue of 190 million yuan (-23% yoy) in 2023, accompanied by popularization Yook had a stroke Indication phase III clinical trials are nearing completion (2024E declaration is expected, 2025E approval), which is expected to drive the biopharmaceutical sector to continue to reduce losses in 24-25 (R&D investment is expected to narrow).
Research and development is expected to welcome many bright Chinese medicine pipelines from 2024 to 2025, such as Dandi AMS (International) and the Chinese Medicine Innovative Drug Report. R&D continues to soar high. Since 2018, R&D expenses have been 600 to 900 million yuan, and the R&D rate is 5% to 10% (excluding commercial), ranking in the top 3 listed Chinese medicine companies. We expect R&D to blossom: 1) The company's independent research and release of 20 innovative traditional Chinese medicine pipelines. The Phase III project includes Dandi AMS (international), angina pectoris (international), angina pectoris (international), anshendi, spine pain pills, etc. Nearly ten projects have been carried out, It is expected that NDAs will be submitted one after another from 2024 to 2025; 2) We expect the global phase III clinical trial of Dandi AMS to enter the data clean-up stage. 2024 is expected to uncover the facts and become the first proprietary Chinese medicine to be submitted for an NDA in the US, which is expected to drive the revaluation of Dandi and pipeline values.
Risk warning: Puyuk's sales did not meet expectations, and R&D did not meet expectations.