KELUN PHARMA(SZ:002422) Orient Securities·2024-05-24 03:02Investment Rating - The report assigns a "Buy" rating for the company with a target price of 39.48 CNY based on a 21x P/E ratio for 2024 [1][4]. Core Views - The company is experiencing a robust transformation driven by three key factors, leading to a solid revenue growth of 12.7% in 2023, reaching 21.45 billion CNY, and a significant net profit increase of 44.0%, totaling 2.46 billion CNY [1][18]. - The ADC platform is positioned as a domestic leader, with two ADC products, SKB264 and A166, expected to enter the commercialization phase soon, indicating a promising future for the company's innovative drug pipeline [1][34]. - The company has established a comprehensive synthetic biology production system, benefiting from the recovery of market demand and the expansion of generic drug sales through centralized procurement [1][3]. Summary by Sections Company Overview - The company has evolved from a focus on infusion products to a diversified portfolio including antibiotics, generics, and innovative drugs, establishing a "product" structure with subsidiaries Kolun Pharmaceutical, Kolun Biotechnology, and Chuaning Biology [1][13]. Innovative Drug Segment - Kolun Biotechnology is recognized as a domestic leader in the ADC field, with multiple ADC products nearing commercialization, including SKB264, the first domestic TROP-2 ADC, and A166, the first HER2 ADC for breast cancer in China [1][30][34]. - The ADC platform has received significant validation from Merck, which holds approximately 20.99% of Kolun Biotechnology's shares, enhancing the company's commercial prospects [1][33]. Non-Infusion Segment - The company leads in antibiotic intermediates, with a strong focus on synthetic biology and generics, which are expected to contribute significantly to revenue growth [1][3]. - The non-infusion business has seen a compound annual growth rate (CAGR) of 7.7% from 2018 to 2023, driven by the recovery of antibiotic prices and the approval of new products [1][21]. Infusion Segment - The company maintains a strong position in the domestic infusion market, with innovative products like the "Keli Bag" enhancing cash flow and market share [1][7]. - The infusion segment's gross margin remains high at 64.0% in 2023, supported by an optimized product structure [1][23]. Financial Projections - The company forecasts earnings per share (EPS) of 1.88 CNY, 2.11 CNY, and 2.36 CNY for 2024, 2025, and 2026, respectively, indicating a positive growth trajectory [1][3].