NHWA(SZ:002262) Haitong Securities·2024-10-07 23:36Investment Rating - The report maintains an "Outperform" rating for the company [2][9]. Core Views - The company, Enhua Pharmaceutical, is a leading player in the central nervous system (CNS) drug market in China, with a robust growth trajectory supported by rigid demand for anesthetics during surgeries. The company achieved a revenue of 5.042 billion yuan in 2023, a year-on-year increase of 17.28%, and a net profit of 1.037 billion yuan, up 15.12% year-on-year [6][9]. - The strict regulation of the anesthetic and psychotropic drug sector creates high barriers to entry, ensuring a stable competitive landscape. The company's gross margins for anesthetic, psychotropic, and neurological segments were 88.32%, 76.98%, and 69.58% respectively in 2023 [6][25]. - The negative impact of centralized procurement has largely dissipated, with a low likelihood of additional products being included in centralized procurement in the short term. The company’s revenue from centralized procurement products has decreased significantly, indicating that the adverse effects have been reflected in the financial statements [6][29]. Summary by Sections Company Overview - Enhua Pharmaceutical, established in 1978 and listed in 2008, focuses on the development, production, and sales of CNS drugs, covering anesthetics, psychotropic, and neurological categories. The company has the most approved product specifications in the CNS drug field, with 57 approved new drug formulations and 93 specifications [13][15]. Market Position and Competitive Landscape - The CNS drug market in China is characterized by strict regulations, creating high entry barriers. The number of licensed manufacturers is limited, which stabilizes the competitive environment. Enhua's market share in the CNS drug market has increased from 2.6% in 2020 to 3.13% in 2022 [25][26]. Financial Performance and Forecast - The company’s revenue is projected to grow from 5.893 billion yuan in 2024 to 7.936 billion yuan in 2026, with corresponding net profits of 1.222 billion yuan and 1.724 billion yuan respectively. The expected growth rates for net profit are 17.8%, 19.2%, and 18.3% for the years 2024 to 2026 [8][9]. - The company has launched a new stock incentive plan aimed at motivating key executives and employees, with profit growth targets set at no less than 15%, 33%, and 56% for the years 2024 to 2026 [7][9]. Product Development and Pipeline - The company has a comprehensive product lineup in the anesthetic segment, with significant contributions from major products like Midazolam and Etomidate. The recent approval of TRV130, a new opioid analgesic, is expected to open new growth avenues [9][18]. Cost Control and Operational Efficiency - The company has maintained stable operating expenses while increasing its focus on high-margin anesthetic products. The gross margin has improved from 46.09% in 2016 to 72.83% in 2023, reflecting enhanced profitability [21][23].