Menovo(SH:603538) Guotai Junan Securities·2024-11-03 08:16Investment Rating - The report maintains a "Cautious Accumulate" rating for the company [3][4]. Core Views - The company's Q3 single-quarter profitability improved, with ongoing integration and new business layout advancements [2]. - Revenue for Q1-Q3 2024 reached 949 million yuan, a year-on-year increase of 2.21%, while net profit attributable to shareholders was 63.25 million yuan, up 15.97% year-on-year [3]. - The report highlights a significant increase in net profit for Q3, which reached 44.31 million yuan, a year-on-year growth of 87.08% [3]. Financial Performance Summary - Q1-Q3 2024 gross margin was 31.88%, a decrease of 0.6 percentage points year-on-year, primarily due to price competition in the raw material drug sector [3]. - The Q3 single-quarter gross margin improved to 36.09%, reflecting a 0.02 percentage point increase year-on-year and an 11.70 percentage point increase quarter-on-quarter [3]. - The report notes a net profit margin increase to 7.13% for Q1-Q3 2024, up 0.67 percentage points year-on-year, attributed to optimized expense ratios [3]. Business Development and Strategy - The company is accelerating new product research and registration in the raw material drug business, with 18 and 10 registration documents submitted in 2023 and H1 2024, respectively [3]. - In the formulation sector, 27 products have been approved domestically as of 2023, with 4 new submissions and 12 approvals expected in H1 2024 [3]. - The CDMO segment is progressing well, with 9 veterinary drug products under development and validation, and 2 products in the registration document submission phase [3]. Valuation and Price Target - The EPS forecast for 2024-2026 has been revised down to 0.41, 0.81, and 1.05 yuan, respectively, from previous estimates of 0.53, 0.98, and 1.37 yuan [3]. - The target price has been raised to 15.26 yuan from 13.72 yuan, based on a PE ratio of 19X for 2025 [3][4].