Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 623 million yuan, a year-on-year increase of 6.64%, and net profit to mother of 118 million yuan, an increase of 25.79% year-on-year, after deducting non-net profit of 66 million yuan, an increase of 1.98% year-on-year.
On a quarterly basis, 2023Q4 achieved revenue of 169 million yuan, a year-on-year decrease of 4.36%, net profit of 0.29 million yuan, a year-on-year increase of 67.37%, after deducting non-net profit of 0.17 million yuan, an increase of 45.94%; the company's revenue in a single quarter was relatively steady, up 12.15% month-on-month, showing a good recovery trend, and single-quarter profit increased at a low base.
Expense rates declined steadily during the period, and factory depreciation affected short-term gross profit levels. The company's 2023 sales expense ratio was 8.90%, down 0.15pp year on year, management expense ratio 14.86%, down 0.37 pp year on year, R&D expense ratio 5.81%, down 0.47pp year on year, financial expense ratio -0.64%, up 0.40pp year on year. The overall cost ratio of the company was optimized. Among them, the financial expense ratio increased slightly, mainly due to a decrease in interest income for the current period. With the gradual commissioning of the fund-raising factory area, related depreciation and amortization increased, which had a certain impact on the company's profit margin. In 2023, the company's gross profit margin was 41.62%, down 2.00 pp year on year, and the net profit margin was 18.93%, up 2.88pp year on year.
Demand for rubber plugs is gradually picking up, and on-going projects are well stocked. In 2023, the company's revenue from coated rubber stopper products was 319 million yuan, up 3.07% year on year, and revenue from conventional rubber stopper products was 291 million yuan, up 10.59% year on year. Along with the continuous recovery in demand for diagnosis and treatment since the beginning of the year, demand for supporting rubber stopper products was gradually released, and related products ushered in steady growth. The company continues to increase market development and terminal marketing based on continuous brand technology advantages. In 2023, 284 new customers including Shanghai Gloria Ying, Yunnan Baiyao, and Huaxi Biotech were added, and 2,398 authorized projects. It is expected that products will be approved jointly with many pharmaceutical customers, and it is expected to gradually enter the market in the future.
Production capacity projects are progressing rapidly, and various new products such as injection pens and pre-encapsulated products are progressing smoothly. In 2023, the company made every effort to promote the construction and commissioning of automation and intelligent factory transformation projects and projects to expand the production capacity of pre-filled medical packaging materials. Currently, many new varieties, such as high-value butyl rubber stoppers, rubber components for pen syringes, and pre-filled syringes, have completed product development and registration, and successfully entered the joint customer verification stage. In 2024, the company will further accelerate the pace of joint verification and related review of related types of customers, promote the development of COC products, and promote the rapid development of the company's revenue scale.
Profit forecast and investment suggestions: According to financial data, we are adjusting the profit forecast. It is expected that the company's profitability will gradually pick up after COVID-19. The medical supervision policy may cause short-term fluctuations in new product admissions. It is estimated that 2024-2026 operating income is 7.53, 9.78, 1.286 billion yuan (+21%, +30%, +31%), adjusted to 10.01 billion yuan and 1.37 billion yuan in the first 24-25 years; estimated net profit of 1.24, 1.78, 2.55 billion yuan (+5%, +43%, +44%) before adjustment 1.82 to 283 million yuan. The company's current stock price corresponds to about 24, 16, 11 times PE in 2024-2026. Considering the vast space for medicinal rubber plugs, the company, as a domestic leader, will gradually expand its market share, intelligently transform and expand production to break production capacity bottlenecks, and create new growth points. Performance is expected to maintain rapid growth and maintain a “buy” rating.
Risk warning: New product development, registration and certification risks, policy change risks, exchange rate changes risks, public information used in research reports may be delayed or not updated in a timely manner.