原料药：量增弥补价格下滑，积极修炼内功。24H1 年原料药及中间体销售收入9.1 亿元（-9%）；其中主要自营原料药销售收入4.89 亿元（-1.2%），意大利子公司销售收入2.97 亿元（-15%），仙曜贸易公司销售收入1.1 亿元，其他原料药贸易0.12 亿元。看单二季度，我们预计，在自营原料药价格同比高基数的情况下，公司凭借自身竞争优势通过销售量增长基本弥补价格下滑；同时单二季度受海外客户下游去库存以及汇率等影响，意大利 Newchem 短期波动。Matters:
On August 26, the company released its 24-year report. 24H1's revenue was 2.138 billion yuan (+0.93%), net profit due to mother 0.34 billion yuan (+12.56%), after deducting non-attributable net profit of 0.331 billion yuan (+11.78%). 24Q2's revenue was 1.1 billion yuan (-5.25%), net profit due to mother was 0.189 billion yuan (+11.80%), and net profit of non-return to mother was 0.186 billion yuan (+13.35%). The results are in line with market expectations.
Commentary:
APIs: Volume increases make up for price declines, and actively practice internal skills. In 24H1, sales revenue of APIs and intermediates was 0.91 billion yuan (-9%); of these, the sales revenue of the main proprietary APIs was 0.489 billion yuan (-1.2%), the sales revenue of the Italian subsidiary was 0.297 billion yuan (-15%), the sales revenue of Xianyao Trading Company was 0.11 billion yuan, and the trade of other APIs was 0.012 billion yuan. Looking at the second quarter of the single, we expect that in a situation where the price of proprietary APIs is high compared to the previous year, the company will use its competitive advantage to basically make up for the price decline through sales volume growth; at the same time, Italy's Newchem fluctuates in the short term in the second quarter due to the influence of overseas customers' downstream inventory removal and exchange rates.
We expect that in the non-regulated market, product prices will bottom out, downstream customer inventory removal will basically end, and with the company's standardized market orders, the API business is expected to achieve steady growth and profit improvement in the medium to long term.
Formulation side: In terms of domestic formulations, sales adjustments achieved remarkable results in the first half of '24. Sales revenue of 2024H1 formulations was 1.215 billion yuan (+10.6%), of which sales revenue of proprietary pharmaceutical products was 1.163 billion yuan (+9%). By sector, the company's gynaecology and family planning revenue was 0.233 billion yuan (-1%), anesthetic muscle relaxation revenue was 0.063 billion yuan (+28%), respiratory revenue was 0.393 billion yuan (+30%), dermatology products were 0.12 billion yuan (+26%), and generic drug revenue was 0.3 billion yuan (-6%). Judging from the situation in the second quarter, we expect the company's formulation revenue to grow by a year-on-year or close to double digits. We think this reflects: 1) Currently, the company's formulation business is gradually moving away from the negative impact of core product collection; 2) the results of the company's formulation sales system adjustments are gradually showing. Looking ahead to 2024, the company's sales system and sales channel adjustments will be basically completed, and various new products (gynecology, anesthesia, etc.) will continue to be released, and domestic formulations are expected to continue to contribute to the company's good performance.
In terms of pharmaceutical exports, the company's prednisolone tablets were approved by the US FDA in May of this year. It is the company's first formulation product to be approved by the FDA, opening up a new situation where the company's formulations go overseas.
Investment advice: We expect the company's net profit to be 6.67, 8.30, and 1,030 million yuan in 2024-2026, up 18.5%, 24.3%, and 24.1% year-on-year, and EPS of 0.67, 0.84, and 1.04 yuan, respectively. The current stock price corresponding to 2024-2026 PE is 17, 14, and 11 times, respectively. Considering the company's clear and rapid growth prospects, as well as the natural advantages of high barriers, few players, and large space on the steroid track, we believe that a higher valuation level should be appropriately given. Referring to comparable company valuations, 25 times PE for 2024, corresponding to a target price of 17 yuan, maintain a “strong” rating.
Risk warning: 1. The pace of increase in capacity utilization at the Yangfu API base falls short of expectations. 2. The development progress of preparations such as anesthesia and respiratory medicine did not meet expectations. 3. Competition for API products has intensified.
