HVSEN BIOTECH(SZ:300871) Guoxin Securities·2024-04-29 02:00Investment Rating - The investment rating for the company is "Buy" [1][3][31] Core Views - The company's short-term performance is under pressure due to weak downstream demand and credit impairment provisions, with 2023 revenue at 1.02 billion yuan, down 0.31% year-on-year, and net profit attributable to the parent company at 16.78 million yuan, down 68.18% year-on-year [1][11][31] - The company is expected to benefit from the recovery of the pig breeding cycle and the gradual release of new production capacity, leading to a potential rebound in performance [1][31] Summary by Sections Financial Performance - In 2023, the company achieved operating revenue of 1.02 billion yuan, a decrease of 0.31% year-on-year, primarily due to losses in downstream breeding and tight funding affecting veterinary drug demand [1][11] - The net profit attributable to the parent company was 16.78 million yuan, a decline of 68.18% year-on-year, impacted by low capacity utilization and high production costs [1][11] - The first quarter of 2024 saw revenue of 207 million yuan, down 10.24% year-on-year, with a net loss of 16.41 million yuan, down 210.43% year-on-year [6][11] Business Segments - The veterinary pharmaceutical formulation business generated revenue of 718 million yuan in 2023, down 7.24% year-on-year, while the gross margin improved by 3.13 percentage points to 26.79% [12] - Revenue from veterinary raw materials was 201 million yuan, up 77.21% year-on-year, but with a negative gross margin of 0.22% due to low capacity utilization and production process improvements still needed [12] Future Outlook - New projects are expected to gradually come online, with the company poised to benefit from the recovery in the pig breeding cycle in the first half of 2024 [1][31] - The company has launched a new generation of animal-specific antibiotics, which may enhance its competitive edge as production capacity increases [1][31] Financial Projections - The net profit forecasts for 2024 and 2025 have been adjusted to 70 million yuan and 160 million yuan, respectively, down from previous estimates of 100 million yuan and 280 million yuan [1][31] - The projected net profit for 2026 is 80 million yuan, with corresponding price-to-earnings ratios of 37.1, 15.6, and 30.9 times for the respective years [1][31]