XJZY(002332) 华创证券·2024-10-28 06:39Investment Rating - Strong Buy (Maintained) with a target price of 17 CNY, current price at 12.70 CNY [1] Core Views - The company's Q3 2024 performance met market expectations, with revenue of 3.237 billion CNY (-0.01% YoY) and net profit attributable to shareholders of 530 million CNY (+12.42% YoY) [1] - The company's slow but steady growth potential is promising, driven by its transition from generic drugs to high-end and innovative drugs [2] Business Segments Formulation Business - Formulation revenue reached 1.93 billion CNY (+8.3% YoY) in the first three quarters of 2024, with significant growth in respiratory (615 million CNY, +32% YoY) and dermatology (188 million CNY, +20% YoY) segments [2] - The company expects to file and receive approval for 4-5 new products annually over the next three years, marking a shift towards high-end and innovative drug development [2] - The first formulation product, Prednisolone Tablets, was approved by the US FDA in May 2024, opening new opportunities for international expansion [2] API Business - API revenue was 1.3 billion CNY (-10% YoY) in the first three quarters of 2024, primarily due to inventory adjustments by downstream customers and reduced trade business [2] - With the stabilization of inventory levels and the upgrade of sterile APIs, the API business is expected to achieve double-digit growth in 2025 [2] Financial Forecast - The company's net profit attributable to shareholders is forecasted to be 683 million CNY (+21.4% YoY) in 2024, 848 million CNY (+24.1% YoY) in 2025, and 1.06 billion CNY (+25.0% YoY) in 2026 [3] - EPS is projected to be 0.69 CNY in 2024, 0.86 CNY in 2025, and 1.07 CNY in 2026, with a P/E ratio of 18x, 15x, and 12x respectively [3] - The company's revenue is expected to grow by 3.3% in 2024, 15.7% in 2025, and 16.0% in 2026, driven by both formulation and API businesses [3] Valuation - The company's valuation is supported by its strong growth prospects and the high barriers to entry in the steroid hormone market [3] - A target P/E ratio of 20x for 2025 is applied, resulting in a target price of 17 CNY [3]