MEIHUA BIO、MeiHua Group(SH:600873) Haitong Securities·2024-03-19 16:00Investment Rating - The report maintains an "Outperform" rating for Meihua Holdings Group with a target price of RMB 13.00, based on a current price of RMB 10.49 [2][15]. Core Views - The company aims to become a leader in synthetic biology, leveraging its large-scale bio-manufacturing capabilities and focusing on collaborations with top global biotechnology firms [7][14]. - The earnings forecast has been adjusted downward due to a decline in product prices, with expected EPS for 2024-2026 at RMB 1.20, RMB 1.32, and RMB 1.46 respectively [15]. Financial Performance - In 2023, the company achieved operating income of RMB 27.761 billion, a year-on-year decline of 0.63%, and a net profit of RMB 3.181 billion, down 27.81% [10][11]. - The fourth quarter of 2023 saw a recurring net profit of RMB 983 million, up 42.39% quarter-on-quarter and 17.84% year-on-year [10][11]. - The company’s gross profit margin for 2023 was 19.7%, with projections for 2024-2026 indicating slight improvements [9][15]. Business Segments - The animal nutrition amino acids segment reported revenue of RMB 14.539 billion, a decline of 2.46% year-on-year, with a gross margin of 12.22% [12]. - The human medical amino acids segment achieved revenue of RMB 563 million, up 2.25% year-on-year, with a gross margin of 27.25% [12]. - The food taste optimization products segment generated RMB 9.832 billion in revenue, down 2.64% year-on-year, while the other products segment saw a revenue increase of 14.46% to RMB 2.504 billion [12]. Research and Development - The company has increased its investment in R&D, successfully launching new strains and processes that significantly reduce production costs [13][14].