huahaipharm(600521) 华创证券·2024-06-13 23:01Investment Rating - The report assigns a "Strong Buy" rating to Huahai Pharmaceutical (600521) with a target price of 24.5 CNY, compared to the current price of 17.30 CNY [1][7]. Core Views - The report highlights that Huahai Pharmaceutical is positioned for a new growth phase, driven by positive trends across its three main business segments: domestic formulations, active pharmaceutical ingredients (APIs), and overseas formulations. The company is expected to enhance its global competitiveness and improve profitability as manufacturing scale and efficiency increase [1][12]. Summary by Sections Domestic Formulations - The company received approval for 15 new products in 2023, the highest number in its history, which is expected to drive growth in this segment. The company is optimizing its sales team and expanding its market coverage, aiming for a significant increase in market share [1][16][22]. - The domestic formulation business is anticipated to maintain a high growth rate, with expectations of 16-20 new product approvals annually over the next three years, potentially reaching over 100 approved formulations [22][24]. Active Pharmaceutical Ingredients (APIs) - Despite facing short-term challenges such as increased competition and price pressures, the API segment has maintained a high gross margin, indicating strong production capabilities. The company is well-positioned for long-term growth due to its focus on chronic disease medications and a robust pipeline of new products [1][26][28]. - The recovery of inventory levels among downstream customers is expected to boost demand for APIs, supporting sustained growth in this segment [27][28]. Overseas Formulations - The company achieved 8 ANDA approvals in the U.S. in 2023, maintaining a steady pace of new submissions since 2018. The focus on high-barrier products is expected to lead to profitability in the overseas formulation business [1][6][12]. - The report suggests that the overseas formulation segment is on the verge of turning profitable as new products begin to contribute to revenue [1][6]. Future Developments - Huahai Pharmaceutical is actively pursuing opportunities in biopharmaceuticals and small molecule innovative drugs, with over 14 products in the pipeline. This strategic move aims to unlock greater growth potential in the future [1][12][26]. - The company is also enhancing its retail business by forming strategic partnerships with over 70 pharmacy chains and expanding its market presence in grassroots healthcare [25][26].