Youcare Pharmaceutical (688658) Huafu Securities·2024-11-05 10:22Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 20% relative to the market benchmark index within the next six months [13]. Core Insights - The company has turned a profit in Q3 2024, exceeding 90 million, with a notable performance excluding impairment losses. Revenue for Q1-Q3 2024 reached 2.99 billion, a year-on-year increase of 1%, while net profit attributable to shareholders was 210 million, up 38% year-on-year [1]. - The company is focusing on its core product, Ginkgo biloba extract, with traditional products' negative impacts from centralized procurement gradually clearing, leading to improved profitability [1]. - Several potential blockbuster products are nearing market readiness, including "Hydroxy Safflower Yellow A" for stroke treatment, which has completed Phase III clinical trials and is awaiting NDA approval [1]. - The company is actively investing in cutting-edge fields such as small nucleic acids and peptides, with promising developments in drug candidates for primary liver cancer [1]. Financial Performance Summary - For 2024, the company is projected to achieve revenues of 4.35 billion, with a growth rate of 4%. Net profits are expected to reach 300 million, reflecting a significant growth rate of 63% [2][11]. - The financial metrics indicate a recovery trajectory, with a gross margin of 64.3% in Q3 2024, up 5.9 percentage points year-on-year [1]. - The company’s sales expenses for Q3 2024 were 400 million, a 20% increase year-on-year, while R&D expenses decreased by 10% to 80 million [1]. Future Projections - Revenue forecasts for 2024, 2025, and 2026 are 4.35 billion, 4.78 billion, and 5.40 billion respectively, with growth rates of 4%, 10%, and 13% [2][11]. - Net profit projections for the same years are 300 million, 410 million, and 510 million, with growth rates of 63%, 35%, and 27% respectively [2][11].