Investment Rating - The investment rating for the company is upgraded to "Buy" with a target price of HKD 11.58 [3][12]. Core Views - The company's 2023 earnings exceeded expectations, with a revenue growth of 21.2% to RMB 13.74 billion, driven by a significant recovery in demand for intermediates and active pharmaceutical ingredients in overseas markets, as well as a gradual recovery in the domestic market [1]. - The company expects stable revenue growth from 2024 to 2026, with a projected CAGR of 6.9% from 2023 to 2026, supported by improving demand in the pharmaceutical sector, a rebound in insulin business revenue, and continued growth in the animal health business [2]. - The company has multiple diabetes drugs in its R&D pipeline, with potential approvals for liraglutide, degludec insulin, and semaglutide expected in 2024 and 2025, which could provide new revenue growth points [2]. Summary by Sections Financial Performance - In 2023, the company's revenue reached RMB 13.74 billion, a 21.2% increase year-on-year, slightly above expectations. The revenue from intermediates and active pharmaceutical ingredients grew by 44.9% and 23.7%, respectively [1]. - The gross profit margin improved from 43.8% to 46.1%, and the net profit attributable to shareholders increased by 70.9% to approximately RMB 2.70 billion, exceeding expectations by 18.8% [1][8]. Revenue Forecast - Revenue forecasts for 2024 and 2025 have been slightly raised by 0.05% and 2.5%, respectively, with expected revenues of RMB 15.10 billion and RMB 15.94 billion [2][9]. - The insulin business, which saw a 4.9% decline in 2023, is expected to recover starting in 2024, with a projected CAGR of 11.4% from 2023 to 2026 [2]. Valuation - The target price has been adjusted to HKD 11.58 based on a 7.0x 2024E PER valuation, reflecting an increase in net profit estimates for 2024 and 2025 by 21.2% and 23.0%, respectively [3][10].
2023年盈利超越预期，未来将稳健增长