- 2024,04,27
After the market on April 25th, Cheng Yi Pharmaceutical (603811. SH) disclosed its 2023 annual report and the first quarter report for 2024. In 2023, the company's revenue and profit maintained steady growth, with a total annual revenue of 672 million yuan, a year-on-year increase of 2.54%. As of the first quarter of 2024, the company achieved a revenue of 153 million yuan, a year-on-year increase of 3.54%. In terms of profits, the company achieved a net profit attributable to shareholders of 163 million yuan in 2023, with a slight increase year-on-year.
It is worth noting that the company has simultaneously disclosed its profit distribution plan. This time, the company plans to distribute a cash dividend of 2 yuan (including tax) to all shareholders for every 10 shares. Based on the total share capital at the end of 2023, a total of approximately 65.4609 million yuan will be distributed, accounting for 40.19% of the net profit attributable to the parent company. According to statistics, since 2017, the company has persisted in dividend distribution for a total of 7 years, with a total amount of 330 million yuan. The dividend payout rate has remained above 34%, benefiting all investors.
Joint category revenue exceeds 400 million yuan, with continuous expansion of products under development
Looking at the business operation data of Cheng Yi Pharmaceutical, the stable growth of joint drug revenue is undoubtedly an important pillar of the company's performance. According to the main operating data disclosed by the company in 2023, the company's revenue from joint drugs reached 407 million yuan, a year-on-year increase of 14.61%. In the first quarter of 2024, the revenue from joint drugs was 95.5314 million yuan, a further year-on-year increase of 32.50%. From the perspective of growth rate, it may not be impressive, but in the past few years, the joint drugs mainly based on aminoglycosides have maintained stable and good growth, providing important support for the company's performance.
According to announcement data, joint drugs have been steadily increasing at an annual growth rate of over 10% since 2020, with a total revenue of 271 million yuan. In 2023, the revenue has exceeded 400 million yuan.
In the field of aminoglycans, Cheng Yi Pharmaceutical has sufficient competitiveness. On the one hand, chitin from crab shells and shrimp shells is the main raw material for ammonia sugars, and the company's factory is located in Dongtou District, Wenzhou City, which is rich in marine resources, with a significant cost advantage in obtaining raw materials; On the other hand, from a market perspective, the company's glucosamine capsules won the third batch of national centralized procurement as early as August 2020, ranking first, and obtained 41% of the hospital market share in 9 provinces and cities nationwide. In 2021, the hospital market share rapidly increased to 22.24%, second only to Zhengda Tianqing, fully proving the market recognition of the product itself. Especially with the increasing aging population in China, the market space for aminoglycan products that help repair cartilage is also expanding, and the company has indeed benefited from market expansion in recent years.
Furthermore, in early 2023, the medical insurance catalog was adjusted, and the medical insurance payment for the glucosamine category was no longer limited to the scope of work-related injury insurance, which also brought sustained market growth space for this product.
At the same time, the company is constantly exploring new growth points through research and development innovation. In 2023, the company's R&D expense ratio increased to over 7.02%, and the first quarter report further increased to 7.70%. During the reporting period, the company prioritized profitable varieties based on its advantages, and carried out consistency evaluation work in a focused and planned manner. There were 14 new products under development, and multiple research and development projects were steadily advancing, which is expected to provide support for the company's future sustainable development.
The fish oil industry has opened up new business growth points, with the health product business taking the lead
While the production and sales of traditional products such as ammonia sugar have steadily increased, the company has gradually formed unique competitiveness in the new business field of fish oil in recent years.
According to business data disclosure, the company's food industry revenue significantly increased in 2023, achieving a revenue scale of 3.5968 million yuan. Although relatively small compared to the overall size of the company, this is not only an important series of products in the fish oil field, but also a landmark achievement for the company's development in the health product field. In the first quarter of 2024, food revenue reached 950000 yuan, a year-on-year increase of 2.53 times.
Behind the growth of food revenue is the launch and expansion of the company's fish oil health products. Since the beginning of 2023, the company has been continuously promoting online and offline multi-channel traffic and promotion work around the four fish oil soft capsule products that have been listed. Through cooperation with authoritative media such as CCTV, the company has promoted the product's publicity and promotion efforts, and its effectiveness has undoubtedly been reflected in performance.
Furthermore, during the reporting period, high-purity fish oil EPA health food and "nerve acid" series products were successfully launched, and "Guanchengbao" ® Fish Oil Soft Capsule "Yi Kang Gu" ® Fish oil soft capsules have completed the registration and marketing of domestically produced health food. Health products may bring more highlights to the company's business operations in the future.
In addition, it is worth noting the construction of the company's 1000 ton high-purity EPA production line. It is understood that 97% pure EPA (ethyl eicosapentaenoate) is the first FDA approved lipid-lowering EPA drug with scarcity. In this field, the company is actively promoting the construction of the "largest scale, best quality, highest purity, and lowest cost" high-purity EPA production capacity project, which is expected to help the company establish a leading position in this field after completion. It is understood that the overseas original drugs of high-purity EPA have been approved in China in July 2023, and the research and development of related generic drugs in China is expected to accelerate. The demand for high-purity EPA raw materials is expected to continue to increase. After the production capacity is implemented, the company is expected to open up new business growth points with high-purity EPA.
Regarding future development strategies, the company has also clearly stated that it will leverage its advantages in the field of marine medicine, combine with its existing hydrochloride glucosamine drugs and fish oil soft capsule health products, establish a marine drug development platform, expand the variety of marine drugs, and develop marine biopharmaceuticals.