SHANDONG PHARMACEUTICAL GLASS(600529):MOLDED BOTTLES IN NEUTRAL BOROSILICATE GLASS FACING ACCELERATING IMPROVEMENTS IN BUSINESS CLIMATE;VALUATIONS HAVE LARGE UPSIDE ON SOLID DEMAND
SHANDONG PHARMACEUTICAL GLASS(600529):MOLDED BOTTLES IN NEUTRAL BOROSILICATE GLASS FACING ACCELERATING IMPROVEMENTS IN BUSINESS CLIMATE;VALUATIONS HAVE LARGE UPSIDE ON SOLID DEMAND
2023 and 1Q24 results miss our expectations
2023 年和 24 年第一季度的業績未達到我們的預期
Shandong Pharmaceutical Glass announced its 2023 and 1Q24 results. In 2023, revenue rose 19% YoY to Rmb5bn, and attributable net profit grew 25% YoY to Rmb776mn. In 4Q23, revenue rose 9.2% YoY to Rmb1.3bn and net profit grew 31% YoY to Rmb162mn. In 1Q24, revenue rose 2.5% YoY to Rmb1.27bn, and attributable net profit grew 33% YoY to Rmb221mn, missing our expectations due to early provisioning for expenses such as major bonuses.
山東藥玻公佈了其2023年和24年第一季度的業績。2023年，收入同比增長19％至人民幣50億元，應占淨利潤同比增長25％，達到7.76億元人民幣。在23年第四季度，收入同比增長9.2％至13億元人民幣，淨利潤同比增長31％，達到1.62億元人民幣。24年第一季度，收入同比增長2.5％，至12.7億元人民幣，應占淨利潤同比增長33％，至2.21億元人民幣，未達到我們的預期，原因是提前準備了主要獎金等費用。
Revenue growing rapidly; product mix improving further in 2023. Sales value of core products molded bottles and brown bottles rose by both 29% YoY to Rmb2.26bn and Rmb1.12bn in 2023. Sales volume of molded bottles in neutral borosilicate glass reached 1.4bn units in 2023 (vs. only 800mn units in 2022). In addition, sales value of ampoules, tube bottles, rubber stoppers, and aluminum caps rose 24%, 18%, 13%, and - 3% to Rmb73mn, Rmb200mn, Rmb260mn, and Rmb56mn in 2023, respectively.
收入快速增長；2023 年產品組合進一步改善。核心產品模製瓶和棕色瓶的銷售價值同比增長29％，達到22.6億元人民幣和2023年11.2億元人民幣。2023年，中性硼硅酸鹽玻璃模壓瓶的銷量達到14億個（而2022年僅爲8億個）。此外，安瓶、管狀瓶、橡膠瓶塞和鋁瓶蓋的銷售額在2023年分別增長了24％、18％、13％和-3％，達到7300萬元人民幣、2億元人民幣、2.6億元人民幣和5600萬元人民幣。
Gross margin rising steadily: In 2023, blended gross margin rose 1.2ppt YoY to 28% due to falling sodium carbonate prices. Gross margin of molded bottles fell 0.6ppt to 39%, while gross margin of brown bottles expanded 3ppt to 24%, helping gross profit grow 24% YoY in 2023.
毛利率穩步上升：由於碳酸鈉價格下跌，2023年，混合毛利率同比增長1.2個百分點至28％。模製瓶的毛利率下降了0.6個百分點至39％，而棕色瓶的毛利率增長了3個百分點至24％，使毛利在2023年同比增長了24％。
Rising expense ratio: Selling, G&A, and R&D expenses rose 33%, 30%, and -1% YoY in 2023, respectively. Consequently, selling, G&A and R&D expense ratios expanded 0.4ppt, 0.4ppt and -0.5ppt YoY in 2023, respectively. In 4Q23, selling and G&A expense ratios rose 1ppt and 2.2ppt YoY.
費用比率上升：2023年，銷售、併購和研發費用分別同比增長33％、30％和-1％。因此，銷售、併購和研發費用比率在2023年分別同比增長了0.4個百分點、0.4個百分點和-0.5個百分點。在23年第四季度，銷售和併購費用比率同比增長了1個百分點和2.2個百分點。
Excellent cash flow: In 2023, The firm's net operating cash flow rose by Rmb796mn YoY to Rmb1.05bn, and its cash from sales-to-revenue ratio rose 5.7ppt YoY to 95%.
卓越的現金流：2023年，該公司的淨運營現金流同比增長7.96億元人民幣，達到10.5億元人民幣，其現金銷售收入比率同比增長5.7個百分點至95％。
Solid financials: Net cash on hand and wealth management products combined stood at Rmb2.7bn at end-2023. The firm declared a dividend of Rmb0.4/sh, implying a dividend payout ratio of 34%.
穩健的財務狀況：截至2023年底，手頭淨現金和财富管理產品合計爲27億元人民幣。該公司宣佈派發0.4元人民幣的股息，這意味着股息支付率爲34％。
Revenue dragged by declined trade: In 1Q24, revenue rose only 2.5% YoY. We believe the business for molded bottles in neutral borosilicate glass continued to grow rapidly, while molded and brown bottle businesses combined maintained double-digit growth. However, trade revenue declined, whereas other categories such as tube bottles and ampoules remained largely stable.
受貿易下降拖累的收入：在24年第一季度，收入僅同比增長2.5％。我們認爲，中性硼硅酸鹽玻璃模壓瓶業務繼續快速增長，而模製和棕色瓶子業務合計保持了兩位數的增長。但是，貿易收入下降，而其他類別，例如管狀瓶和安瓶，基本保持穩定。
Rapid recovery in gross margin: In 1Q24, gross margin rose 6.9ppt YoY to 31% (+3ppt QoQ), driving gross profit up 34% YoY (+8% QoQ).
毛利率快速恢復：在24年第一季度，毛利率同比增長6.9個百分點至31％（環比增長3個百分點），推動毛利同比增長34％（環比增長8％）。
Expenses rose on provisioning for incentive scheme: In 1Q24, selling and G&A expense ratios rose 0.3ppt and 1.3ppt YoY, mainly due to provisioning for annual incentive expenses in 1Q24.
激勵計劃準備金導致支出增加：在24年第一季度，銷售和併購費用比率同比增長0.3個百分點和1.3個百分點，這主要是由於24年第一季度的年度激勵支出準備金。
Net margin rose to a high level. In 1Q24, net margin rose 4ppt YoY to 17.4%.
淨利潤率升至較高水平。在24年第一季度，淨利潤率同比增長4個百分點至17.4％。
Trends to watch
值得關注的趨勢
Upside in valuation; accelerating improvements in business climate of molded bottles in neutral borosilicate glass: We expect sales volume and prices of molded bottles in neutral borosilicate glass to continue accelerating driven by centralized procurement. This, coupled with falling raw material prices, leads us to estimate that profit CAGR over 2023-2025 may reach 26%. The pharmaceutical packaging material industry in both China and overseas has solid demand. Many companies in the industry (e.g., Schott AG and West Pharma) have expensive valuations. We believe valuations of Shandong Pharmaceutical Glass still have upside potential thanks to strong market demand and its rapid profit growth.
估值上漲；中性硼硅酸鹽玻璃模壓瓶的商業環境加速改善：我們預計，在集中採購的推動下，中性硼硅酸鹽玻璃模壓瓶的銷量和價格將繼續加速。再加上原材料價格的下跌，使我們估計，2023-2025年的利潤複合年增長率可能達到26％。中國和海外的藥品包裝材料行業都有穩健的需求。該行業的許多公司（例如肖特股份公司和西方製藥）的估值都很昂貴。我們認爲，得益於強勁的市場需求及其快速的利潤增長，山東藥玻的估值仍具有上行潛力。
Financials and valuation
財務和估值
We leave our 2024 profit forecast unchanged at Rmb1.02bn and introduce our 2025 forecast of Rmb1.23bn. The stock is trading at 20x and 17x 2024e and 2025e P/E. We maintain OUTPERFORM rating. Considering a valuation rollover from 2023 to 2024, we raise our target price 6% to Rmb37.2, implying 24x and 20x 2024e and 2025e P/E, offering 20% upside.
我們將2024年的利潤預測維持在10.2億元人民幣不變，並公佈了2025年12.3億元人民幣的預測。該股的交易價格爲2024年的20倍和17倍以及2025年的市盈率。我們維持跑贏大盤的評級。考慮到估值將從2023年延續到2024年，我們將目標價格上調6％至37.2元人民幣，這意味着2024年和2025年市盈率爲24倍和20倍，上漲幅度爲20％。
Risks
風險
Slower-than-expected ramp-up of molded bottles in neutral borosilicate glass; intensifying competition; sharper-than-expected fluctuations in raw material prices.
中性硼硅酸鹽玻璃成型瓶的上漲速度低於預期；競爭加劇；原材料價格的波動超出預期。
譯文內容由第三人軟體翻譯。