The company publishes an annual report for '23 and a quarterly report for '24. In '23, the company achieved revenue of 3.477 billion yuan (+10.14%, all the following are year-on-year values), net profit to mother of 881 million yuan (+749.02%), and net profit of non-return to mother of 722 million yuan (+495.11%). The sharp increase in profit was mainly due to the impairment of the COVID-19 vaccine-related assets calculated by the company in the same period last year of 799 million yuan. The 24Q1 company achieved revenue of 452 million yuan (-39.65%), net profit of 54 million yuan (-73.69%), net profit after deducting non-return to mother of 0.14 million yuan (-92.42%). The significant decline in the 24Q1 revenue and profit side was mainly due to delays in vaccination until 23Q1 after the release of the 22Q4 epidemic, resulting in a high base figure for the same period last year.

Conventional vaccines have maintained steady growth, and internationalization is progressing smoothly. In 2023, the company's routine vaccines achieved sales revenue of 3,505 billion yuan (+18.98%), of which sales revenue for 13-valent pneumococcal conjugate vaccine and 23-valent pneumopolysaccharide vaccine increased by 55.64% and 36.88% respectively. At the same time, the company is actively seeking opportunities for international cooperation and has reached cooperation agreements with more than 10 countries. In October 2023, the company obtained a “marketing license” for the 13-valent pneumonia conjugate vaccine in Indonesia and signed a “sales contract” with Indonesian partners to open up overseas incremental markets.

The R&D pipeline is well-stocked, and the release of human diploid wild seedlings can be expected. In 2023, the company's human diploid vaccine and live attenuated chickenpox vaccine were approved for marketing. Among them, the human diploid vaccine was approved for the “5 dose method” and the “4 dose method”. The competition pattern for this variety is relatively good, and the dosage can be expected. In addition, the company has made phased progress in a number of products under development: the Sabin variant polio vaccine has been accepted; the adsorbed tetanus vaccine and the quadrivalent influenza virus lysis vaccine are in phase I and III clinical trials; the dTAP-hib-IPV combination vaccine and dTAP-IPV combination vaccine are in phase I clinical trials.

Profit forecasting and investment advice. We expect the company's 2024-2026 EPS to be 0.94, 1.18, and 1.43 yuan/share respectively, giving the company 30 times more reasonable PE than 2024, corresponding to a reasonable value of about 28.25 yuan/share, giving it a “buy” rating.

Risk warning. Risk of new product development falling short of expectations; risk of product market sales and promotion falling short of expectations; declining number of newborns; increased risk of market competition; risk of progress falling short of expectations in internationalization.