Zhejiang Tianyu Pharmaceutical (SZ:300702) Huachuang Securities·2024-11-01 14:14Investment Rating - The report maintains a "Recommended" rating for Tianyu Co., Ltd. with a target price of 21 yuan [1]. Core Views - The company's performance in the first three quarters of 2024 met expectations, with revenue of 1.932 billion yuan (+3.61%) and a net profit attributable to shareholders of 85 million yuan (+23.72%) [1]. - The recovery of the Sartans business, along with the ramp-up of new products, suggests that the company's API business is entering a medium-term growth cycle [1]. - The report highlights that the company's formulation business has shown significant growth and is expected to become an important profit pillar in the medium term [1]. Summary by Sections Financial Performance - In Q3 2024, the company achieved revenue of 667 million yuan (+28.59%) and a net profit of 32 million yuan [1]. - The company is projected to have net profits of 125 million yuan, 245 million yuan, and 326 million yuan for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 357.0%, 95.7%, and 33.2% [2][5]. Business Segments - The Sartans business is stabilizing and entering a recovery phase, with expectations of gradual improvement as downstream clients finish destocking [1]. - Non-Sartan APIs are expected to grow rapidly, with several products set to launch following patent expirations, contributing to overall performance [1]. - The formulation business has seen impressive results, with Q3 2024 revenue reaching 75 million yuan, and the company anticipates approval for 15-20 new products annually over the next two years [1]. CDMO Business - The CDMO segment reported revenue of 85.32 million yuan in Q3 2024, showing a quick recovery [1]. - Future growth is expected from stable commercialized products, collaborations with major pharmaceutical companies, and an expanded R&D and business team [1].