SHYNDEC(SH:600420) Huaxin Securities·2024-08-28 03:09Investment Rating - The report maintains a "Buy" investment rating for the company [1][2]. Core Views - The company continues to experience high growth despite a 7.52% year-on-year decline in revenue for H1 2024, with net profit attributable to shareholders increasing by 108.29% [1]. - The company's operational efficiency is improving, particularly in the raw material drug business, which has shown significant profit elasticity [1]. - The report forecasts revenue growth for 2024-2026, with expected revenues of 112.85 billion, 117.35 billion, and 122.62 billion respectively, and net profits of 11.61 billion, 13.76 billion, and 15.50 billion [2]. Summary by Sections Financial Performance - In H1 2024, the company achieved operating revenue of 59.60 billion, a decrease of 7.52% year-on-year, while net profit attributable to shareholders reached 6.83 billion, reflecting a growth of 108.29% [1]. - The raw material drug segment saw a revenue increase of 5.54% year-on-year, with net profit rising to 4.3 billion from 0.26 billion in the previous year [1]. - The overall gross margin for the raw material and intermediate drug segment was 32.29%, an increase of 10.97 percentage points compared to the previous year [1]. Segment Analysis - The formulation segment faced pressure with a revenue decline of 14.88% year-on-year, attributed to price reductions from centralized procurement [1]. - The narcotic platform showed stable growth, with revenue of 3.39 billion, a year-on-year increase of 20.48% [1]. Profitability Forecast - The report predicts a significant increase in net profit for 2024, with a growth rate of 67.8%, followed by 18.6% in 2025 and 12.6% in 2026 [4]. - The earnings per share (EPS) are projected to be 0.87, 1.03, and 1.16 for the years 2024, 2025, and 2026 respectively [2][4]. Market Position - The company is positioned as a core platform for the development of chemical pharmaceuticals under the China National Pharmaceutical Group, focusing on internal R&D and external collaborations to enhance its product line [2].