Kanion Pharmaceutical(600557) 东方财富·2024-07-30 10:03Investment Rating - Maintain "Overweight" rating [2] Core Views - High base effect led to a year-on-year decline in performance in H1 2024, with revenue of RMB 2.26 billion (-11.49% YoY), net profit attributable to shareholders of RMB 265 million (-3.73% YoY), and non-GAAP net profit of RMB 221 million (-15.95% YoY) [1] - Oral liquid and gel segments showed strong growth, driven by the performance of Jinzhen Oral Liquid and Jingutong Gel [1] - The company has a diversified product portfolio with 207 drug production approvals, including 48 exclusive traditional Chinese medicine (TCM) varieties and 2 TCM protected varieties [1] - R&D expenses accounted for 15.00% of revenue in H1 2024, with significant progress in new drug development across TCM, chemical drugs, and biologics [1] - The company is increasing talent investment and optimizing cost control, with a slight improvement in net profit margin to 12.01% (+0.93pct YoY) [1] Financial Performance - Revenue is expected to grow to RMB 5.60 billion in 2024E, RMB 6.31 billion in 2025E, and RMB 7.04 billion in 2026E, with growth rates of 15.05%, 12.69%, and 11.60% respectively [7] - Net profit attributable to shareholders is forecasted to reach RMB 626 million in 2024E, RMB 751 million in 2025E, and RMB 862 million in 2026E, with growth rates of 16.67%, 19.89%, and 14.88% respectively [7] - EPS is projected to be RMB 1.08 in 2024E, RMB 1.29 in 2025E, and RMB 1.48 in 2026E [7] - The company maintains a high gross margin of 74.55% in H1 2024, with a slight decrease of 0.41pct YoY [1] Product Portfolio - Non-injection products accounted for 62.83% of revenue in H1 2024, an increase of 8.23pct YoY [1] - Key product segments: Injection (RMB 840 million, -27.49% YoY), Oral Liquid (RMB 544 million, +28.60% YoY), Capsules (RMB 402 million, -12.80% YoY), Granules & Powders (RMB 162 million, -15.13% YoY), Tablets & Pills (RMB 169 million, -5.16% YoY), Patches (RMB 104 million, -10.94% YoY), Gels (RMB 21 million, +107.87% YoY) [1] - 112 products are included in the 2023 National Reimbursement Drug List, including 25 exclusive varieties [1] R&D Progress - In H1 2024, the company submitted 3 TCM new drug applications (NDA), completed Phase III clinical trials for 2 TCM products, and obtained clinical trial approvals for 2 TCM products [1] - For chemical drugs, the company completed Phase II clinical trial enrollment for 1 innovative drug and obtained clinical trial approvals for 2 injectable drugs [1] - In biologics, the company is conducting Phase I clinical trials for a monoclonal antibody targeting multiple myeloma and systemic lupus erythematosus [1] Valuation Metrics - The company's market capitalization is RMB 8.06 billion, with a circulating market cap of RMB 8.01 billion [4] - Forward P/E ratios are 14.09x for 2024E, 11.75x for 2025E, and 10.23x for 2026E [7] - Forward P/B ratios are 1.54x for 2024E, 1.36x for 2025E, and 1.20x for 2026E [7] - EV/EBITDA is expected to decrease from 13.90x in 2023A to 4.91x in 2026E [7]