APELOA(000739) 太平洋·2025-03-17 01:23Investment Rating - The report maintains a "Buy" rating for Prolo Pharmaceutical (000739) [1] Core Views - Prolo Pharmaceutical is accelerating its integrated layout of raw materials and formulations, with CDMO expected to enter a new inflation era [1] - The company has established a 2030 development strategy focusing on refining raw materials, strengthening CDMO, enhancing pharmaceuticals, and expanding into medical aesthetics [4][19] - The company has demonstrated long-term development confidence through stock buybacks, with a total repurchase amount of 1.53 billion yuan planned for cancellation [4][23] Summary by Sections Company Overview - Prolo Pharmaceutical, founded in 1989 and listed in 2001, is a leading pharmaceutical manufacturer in China, focusing on raw materials, CDMO, pharmaceuticals, and medical aesthetics [18] - The company has undergone significant strategic adjustments since 2017, implementing a unified management model and achieving its strategic goals by 2023 [19] Raw Material and Medical Aesthetics Business - The company is a leading domestic player in specialty raw materials, with a focus on oral cephalosporins, penicillins, and veterinary raw materials [5] - Prolo has increased the number of API projects significantly, with plans to add 30-50 new DMFs in the next 3-5 years [5] CDMO Business Outlook - The CDMO sector is expected to enter a new inflation era, driven by supportive policies for innovative drugs and a significant increase in project numbers [6][8] - The company has seen a 42% year-on-year increase in projects, indicating a robust growth trajectory for its CDMO business [8] Revenue Growth and Business Segmentation - Prolo's revenue has grown from 78.80 billion yuan in 2020 to an estimated 120.22 billion yuan in 2024, with a compound annual growth rate (CAGR) of 11.14% [32] - The revenue contribution from CDMO and formulation businesses has increased, with CDMO revenue growing at a CAGR of 15.60% from 2020 to 2024 [34] Profitability and Financial Metrics - The company's gross margin has decreased from 27.96% in 2020 to 23.85% in 2024, while the net margin has also declined [38] - Despite the decline in margins, the company continues to invest in R&D, with R&D expenses increasing from 4.44% to 5.34% of total revenue [38]