YILING PHARMACEUTICAL(SZ:002603)2024-05-23 09:00Investment Rating - The report assigns an "OUTPERFORM" rating to the company with a target price of RMB 22.62 [2][5]. Core Insights - The company reported a revenue of RMB 10.32 billion in 2023, a decrease of 17.67% year-on-year, and a net profit attributable to shareholders of RMB 1.35 billion, down 42.76% year-on-year [3][12]. - The decline in revenue was primarily due to decreased market demand for respiratory products, which saw a revenue drop of 51.90% to RMB 3.31 billion [4][13]. - Excluding respiratory products, other patented products showed stable growth, with cardiovascular products achieving a revenue of RMB 4.71 billion, an increase of 12.71% [4][13]. - The company has ongoing research and development efforts, with a focus on traditional Chinese medicine and several new drugs expected to be launched in the coming years [14][15]. Financial Performance Summary - In 2023, the company achieved a revenue of RMB 10.32 billion, with a year-on-year decline of 17.67% [6][9]. - The net profit for 2023 was RMB 1.35 billion, reflecting a decrease of 42.76% year-on-year [6][9]. - The earnings forecast for 2024-2026 predicts net profits of RMB 1.51 billion, RMB 1.80 billion, and RMB 2.13 billion, with respective year-on-year growth rates of 11.8%, 18.8%, and 18.6% [5][15]. Research and Development - The company invested RMB 0.94 billion in R&D in 2023, focusing on new drug development in traditional Chinese medicine and secondary development of existing products [14][15]. - Several new drugs are in various stages of clinical trials, with significant potential for future revenue growth [14][15]. Revenue Breakdown - Revenue from cardiovascular products was RMB 4.71 billion, up 12.71% year-on-year, while other patented products generated RMB 1.87 billion, an increase of 69.72% [4][13]. - The respiratory product segment faced a significant decline, contributing only RMB 3.31 billion to total revenue [4][13].