Ausun Pharm(SH:603229) Tai Ping Yang·2024-08-05 00:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment [1]. Core Insights - The company, Aoxiang Pharmaceutical, has shown steady growth in its API and CXO businesses, while its formulation segment is expected to create a third growth curve starting in 2025 [1][9]. - From 2019 to 2023, the company's revenue compound annual growth rate (CAGR) was 27.62%, and net profit CAGR was 45.95%, with gross margin increasing by 3.27 percentage points and net margin increasing by 12.78 percentage points [1][17]. - The company has a diverse product portfolio, including categories such as liver disease, respiratory, cardiovascular, high-end fluorinated products, prostaglandins, antibiotics, gout, oncology, and nervous system drugs, with a focus on high-difficulty chiral structures [1][9]. Revenue and Profit Growth - The company's revenue increased from 308 million yuan in 2019 to 817 million yuan in 2023, with a slowdown in growth to 6.83% in 2023 [17]. - The net profit rose from 56 million yuan in 2019 to 254 million yuan in 2023, with a 2023 growth rate of 7.87% [17]. - The revenue forecast for 2024, 2025, and 2026 is projected at 963 million yuan, 1.164 billion yuan, and 1.581 billion yuan, respectively, with corresponding net profits of 317 million yuan, 384 million yuan, and 506 million yuan [2]. Product Matrix and Market Position - The first-tier products contribute stable revenue and profit, including Entecavir, Dihydrocodeine, Posaconazole, Nebivolol, and Ciprofloxacin, with Entecavir and Dihydrocodeine holding significant market shares internationally [1][25]. - The second-tier products, such as Sodium Glucose Co-Transporter 2 (SGLT2) inhibitors and others, are expected to see rapid growth in the next three years [1]. - The company has established a deep collaboration with STADA to advance its formulation internationalization process, with the first formulation product expected to be approved in Europe in H2 2024 and in China in H1 2025 [1][9]. R&D and Capacity Utilization - The company has maintained a high R&D investment rate, reaching nearly 10% in 2023, which supports the continuous development of its product pipeline [1][22]. - The production capacity is being expanded with new facilities, which are expected to alleviate current capacity constraints and support future growth [13][14]. Financial Metrics - The company's gross margin improved from 51.78% in 2019 to 55.05% in 2023, while the net margin increased from 18.31% to 31.09% during the same period [22]. - The forecasted price-to-earnings (PE) ratios for 2024, 2025, and 2026 are 22.76, 18.21, and 15.05, respectively, indicating a potential premium valuation due to stable growth in the API and CXO businesses [1][2].