SINO BIOPHARM(01177)2024-08-16 01:43Investment Rating - The report maintains an "Outperform" rating for Sino Biopharmaceutical [6][11][14]. Core Views - The innovative product portfolio is expected to drive double-digit revenue growth, with innovative product revenue reaching 6.13 billion RMB in 2024H1, a year-on-year increase of 14.8% [2][3][12]. - The company has launched six innovative products in 2023 and expects to maintain a launch rate of 3-5 new products annually in 2025-26, indicating a new life cycle for its product portfolio [3][13]. - The company’s revenue for 2024H1 was 15.87 billion RMB, reflecting an 11.1% increase, with a gross margin of 82.1% [2][12]. Summary by Sections Financial Performance - In 2024H1, the company reported revenue of 15.87 billion RMB (+11.1%), with innovative product revenue of 6.13 billion RMB (+14.8%), accounting for 38.6% of total revenue [2][12]. - The net profit attributable to the parent company was 3.02 billion RMB (+139.7%), while the adjusted net profit was 1.54 billion RMB (+14.1%) [2][12]. - As of June 30, 2024, the company had cash reserves exceeding 20 billion RMB [2][12]. Product and Pipeline Development - The company’s product portfolio is focused on four major areas, with significant growth in the anti-tumor and surgical/analgesic segments, while the liver disease segment saw a decline [4][13]. - The anti-tumor segment generated revenue of 5.36 billion RMB (+19.5%), representing 33.8% of total revenue, while the surgical/analgesic segment grew by 29.9% to 2.58 billion RMB [4][13]. Operational Efficiency - The company has improved operational efficiency through centralized procurement and optimized capacity utilization, resulting in a gross margin increase of 0.3 percentage points to 82.1% in 2024H1 [6][13]. - The sales expense ratio has decreased to 43.1% in 2024H1, reflecting improved productivity through digitalization and compliance management [6][13]. Earnings Forecast and Valuation - Revenue forecasts for 2024-25 have been adjusted to 29.5 billion RMB and 33.9 billion RMB, representing year-on-year growth of 13% and 15% respectively [7][14]. - The net profit attributable to the parent company is projected to be 2.9 billion RMB and 3.5 billion RMB for 2024-25, indicating growth of 26% and 16% respectively [7][14]. - The target price is set at 5.65 HKD per share, based on a PE ratio of 32x for 2024 [7][14].