XJZY(SZ:002332) Huachuang Securities·2024-08-27 06:24Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 17 yuan [1]. Core Views - The company's mid-year report for 2024 aligns with market expectations, indicating a positive outlook for operational growth [1]. - The report highlights a 0.93% increase in revenue to 2.138 billion yuan and a 12.56% increase in net profit to 340 million yuan for the first half of 2024 [1]. - The report anticipates a robust growth trajectory for the company, particularly in the steroid hormone sector, which has high barriers to entry and limited competition [1]. Summary by Sections Financial Performance - For the first half of 2024, the company reported total revenue of 2.138 billion yuan, with a net profit of 340 million yuan, reflecting a 12.56% year-on-year increase [1]. - The second quarter of 2024 saw revenue of 1.1 billion yuan, a decrease of 5.25%, but net profit increased by 11.80% to 189 million yuan [1]. - The company expects net profits for 2024-2026 to be 667 million, 830 million, and 1.03 billion yuan, respectively, with year-on-year growth rates of 18.5%, 24.3%, and 24.1% [2]. Business Segments - In the raw materials segment, sales revenue decreased by 9% to 910 million yuan in the first half of 2024, but volume growth is expected to offset price declines [1]. - The formulation segment showed a 10.6% increase in sales revenue to 1.215 billion yuan, with significant growth in anesthesia and respiratory products [1]. - The company received FDA approval for its prednisone tablets, marking a significant milestone for its export business [1]. Valuation - The current stock price corresponds to a price-to-earnings (PE) ratio of 17, 14, and 11 for the years 2024, 2025, and 2026, respectively [2]. - The report suggests a valuation of 25 times PE for 2024, leading to a target price of 17 yuan, reflecting the company's strong growth prospects [1].