Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.87, representing a potential upside of 35.2% from the current price of HKD 5.08 [2][3]. Core Insights - The company experienced a decline in performance due to pressures in the pharmaceutical environment and proactive inventory reduction, with adjusted net profit down 15.2% year-on-year for the first three quarters of 2024 [2]. - Revenue for the first three quarters of 2024 was HKD 22.69 billion, a decrease of 4.9% year-on-year, while gross profit was HKD 15.99 billion, with a gross margin of 70.5%, slightly up by 0.1 percentage points [2]. - The report highlights a shift in the product pipeline, with older products facing revenue declines due to centralized procurement impacts, while new products are expected to drive future growth [2]. Financial Summary - For the first three quarters of 2024, the company reported a net profit of HKD 3.88 billion, down 15.9% year-on-year, with a net profit margin of 17.6%, a decrease of 2.2 percentage points [2]. - The revenue breakdown shows that the prescription drug segment generated HKD 18.67 billion, down 3.5%, while the functional food segment saw a significant decline of 21.9% to HKD 1.29 billion [2]. - Research and development expenses increased by 5.5% year-on-year to HKD 3.88 billion, representing 20.8% of the prescription drug revenue, up 1.8 percentage points [2]. Segment Performance - The report details various segments: - The neurology segment saw a revenue increase of 4.5% to HKD 7.23 billion, but experienced a significant drop of 15.8% in Q3 due to strict cost control measures [2]. - The oncology segment's revenue decreased by 31.2% in Q3, influenced by centralized procurement in the Beijing-Tianjin-Hebei region [2]. - The cardiovascular segment reported a decline of 11.1% to HKD 1.63 billion, with a notable drop of 26.7% in Q3 due to a lack of procurement success [2]. Pipeline and Future Outlook - The company is expected to rely on new product launches to drive growth, with anticipated contributions of approximately HKD 2 billion from innovative products in the coming year [2]. - The report mentions a significant licensing deal with AstraZeneca for a lipoprotein(a) inhibitor, which includes an upfront payment of USD 100 million and potential milestone payments of USD 1.92 billion [2].
石药集团：医药环境压力和主动降低库存导致业绩下滑