Dongcheng Biochem(SZ:002675) Capital Securities·2024-05-08 05:30Investment Rating - The report maintains a "Buy" rating for the company [26]. Core Views - The company's performance in 2023 declined due to multiple negative factors, including reduced demand for raw materials from downstream heparin formulation companies, leading to a provision for inventory impairment of 112 million yuan for heparin sodium raw materials. The raw material business revenue was 1.678 billion yuan, down 18.61%, with a gross margin of 26.10%, and heparin sodium sales volume decreased by 11.79%. The formulation product revenue was 400 million yuan, down 17.20%, primarily due to price declines following the centralized procurement of nadroparin calcium injection in March 2023. However, the nuclear medicine business performed well, with total revenue of 1.017 billion yuan, up 11.20%, driven by key products like 18F-FDG and Yunk injection [2][5]. Financial Summary - In 2023, the company achieved total revenue of 3.276 billion yuan, a decrease of 8.58%, and a net profit attributable to shareholders of 210 million yuan, down 31.75%. The first quarter of 2024 saw revenue of 647 million yuan, down 23.90%, but net profit attributable to shareholders increased by 28.38% to 64.33 million yuan [5][6]. - Revenue projections for 2024 to 2026 are 3.291 billion yuan, 3.616 billion yuan, and 4.009 billion yuan, with year-on-year growth rates of 0.5%, 9.9%, and 10.9%, respectively. Net profit attributable to shareholders is expected to be 305 million yuan, 364 million yuan, and 436 million yuan, with growth rates of 45.7%, 19.1%, and 19.9% [6][17]. Market Position and Future Outlook - The company is advancing its innovative nuclear medicine research, with several new products at various stages of development. Products like 99mTc-labeled tecfidera and sodium fluoride injection have submitted for market approval, while others are in clinical trials. The next 2-3 years are expected to see a concentration of product approvals, which could lead to rapid market expansion due to the established supply network [14].