Event: The company released its 2023 annual report and 2024 quarterly report. In 2023, the Company will achieve a revenue of 2.693 billion yuan, a year-on-year increase of 15.75%, a net profit attributable to the parent of 368 million yuan, a year-on-year increase of 36.54%, and a net profit excluding non attributable to the parent of 340 million yuan, a year-on-year increase of 36.91%. In the first quarter of 2024, the revenue will be 591 million yuan, with a year-on-year growth of 17.74%, the net profit attributable to the parent company will be 126 million yuan, with a year-on-year growth of 63.44%, and the net profit not attributable to the parent company will be 106 million yuan, with a year-on-year growth of 53.90%.
Comments:
The core large items continued to grow at a high rate and actively expanded channels outside the hospital. In 2023, the sales revenue of pharmaceutical preparations of the company will be 2.236 billion yuan, with a year-on-year growth of 15.86%, of which the revenue of the core large single product of loxoprofen sodium gel paste will be 1.547 billion yuan, with a year-on-year growth of 18.70%, and the revenue of other oral preparations will be 689 million yuan, with a year-on-year growth of 9.89%. The company's offline OTC channels outside the hospital grew rapidly, and reached strategic cooperation with 10 leading chains. In 2023, it successfully developed a target of 280 chains, covering a total of 38000 stores, and promoted the rapid expansion of the leading variety of loxoprofen sodium gel paste.
Profitability continued to improve, and the expense rate was steadily optimized. In 2023, the company's net sales interest rate will be 13.68%, with a year-on-year increase of 2.09pp, and the expense rate during the sales period will be 61.86%, with a year-on-year decrease of 2.62pp. In the first quarter of 2024, the company's net profit rate on sales was 21.27%, with a year-on-year increase of 5.95pp. The expense rate during the sales period was 51.44%, with a year-on-year decrease of 7.03pp. The sales expense rate was 40.50%, with a year-on-year decrease of 5.65pp. We believe that the company actively promotes the construction of the marketing network, strengthens the control ability of terminal channels, promotes the continuous optimization of the expense rate, and continuously improves its profitability.
New products are expected to be rapidly released, and the varieties under research are abundant. Ketoprofen gel paste will participate in the national medical insurance negotiation for the first time at the end of 2023, and will be included in the national medical insurance catalogue at a very competitive price, which is expected to enhance the future performance growth potential. The company has two registration certificates for gel paste drugs, and more than 15 externally used preparations are under research, of which 7 are applied for production. We believe that the company takes "transdermal drug delivery preparations" as the core, conducts in-depth research on basic technologies such as gel plasters, establishes technical barriers in related fields, and at the same time, enriches the pipeline under research to inject new growth momentum into the future.
Profit forecast and valuation. The company has unique technical advantages in the field of topical preparation gel plaster. The sales of its core product, loxoprofen gel plaster, has continued to grow rapidly, forming an integrated development layout of "pharmaceutical preparations+APIs+pharmaceutical excipients". It is estimated that the company's net profit attributable to the parent company in 2024-2026 will be 518 million yuan, 694 million yuan and 897 million yuan respectively, with year-on-year growth of 40.7%, 33.8% and 29.4% respectively, and the corresponding EPS will be 1.07 yuan, 1.43 yuan and 1.84 yuan respectively. Referring to comparable companies, we give the company 28-33X PE in 2024, with a reasonable value range of 29.96-35.31 yuan per share, which is covered for the first time and rated as "better than the market".
Risk warning. The R&D progress of innovative products was less than expected, market competition intensified risks, and the volume of core products was less than expected.
