Qianhong Bio-pharma(SZ:002550) EBSCN·2024-04-28 01:32Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [16]. Core Views - The company's cash flow situation has significantly improved, and its innovative transformation is expected to yield positive results in the future [1][14]. - The impact of the heparin cycle has affected current performance, but the company has shown a notable recovery in cash flow [2][3]. Summary by Relevant Sections Financial Performance - For Q1 2024, the company reported revenue of 461 million yuan, a year-on-year decrease of 24.19%. However, the net profit attributable to shareholders was 104 million yuan, an increase of 21.13% year-on-year [1]. - The operating cash flow turned positive at 171 million yuan, a significant improvement compared to the previous year [1][2]. - The company’s annual revenue for 2023 was 1.814 billion yuan, down 21.24% year-on-year, with a net profit of 182 million yuan, down 43.77% year-on-year [12]. Business Segments - In 2023, the revenue from formulations was 1.115 billion yuan, a decrease of 5.67% year-on-year, while the revenue from raw materials was 692 million yuan, down 38.03% year-on-year [2]. - The gross margin for formulations was 61.52%, showing a slight increase, while the gross margin for raw materials was 13.37%, reflecting a decline [2]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders has been adjusted downwards for 2024 and 2025 to 308 million yuan and 368 million yuan, respectively, with a new estimate for 2026 at 421 million yuan, representing a growth of 69.09% year-on-year [3]. - The current stock price corresponds to a price-to-earnings (PE) ratio of 21 for 2024, 17 for 2025, and 15 for 2026 [3]. Research and Development - The company invested 137 million yuan in R&D in 2023, accounting for 7.57% of its revenue, with ongoing clinical trials for several innovative drug candidates [14].