Revenue and profit increased rapidly, and net profit margin increased significantly. The company released the 2024 annual report, in 2024, the company achieved operating income of 2.817 billion yuan (+34.13%), net profit attributable to the parent company of 828 million yuan (+49.00%), gross profit margin of 93.49% (+0.16pcts), net profit margin of 29.38% (+2.93pcts), high growth in revenue and profit throughout the year, and a significant increase in net profit margin. In terms of period expenses, in 2024, the company's sales expense ratio will be 39.52% (-0.89pcts), administrative expense rate will be 9.88% (-0.13pcts), R&D expense rate will be 10.46% (-0.49pcts), and financial expense rate will be -0.08% (+0.15pcts).

Paigebin's sales grew rapidly, and it continued to make efforts to cure hepatitis B clinically. In terms of products, in 2024, the company's antiviral drugs will achieve revenue of 2.447 billion yuan (+36.72%), gross profit margin of 96.22% (+0.70pcts), and as a first-line drug for the treatment of chronic hepatitis B, Paigabine will be further recognized by experts and patients, and sales will maintain high growth. In recent years, the company has continued to participate in and support public welfare or scientific research projects such as "Everest", "Oasis" and "Starlight", and the value of peginterferon α in the clinical cure of chronic hepatitis B has gradually been more recognized by the academic community. In addition, in 2024, the National Health Commission will launch a clinical cure outpatient construction project for hepatitis B, and the penetration rate of interferon therapy will be significantly increased with policy support.

The R&D pipeline is progressing smoothly, and self-research and external cooperation are two-wheel driven. In 2024, the company invested 342 million yuan in R&D (+22.34%), and made a series of progress in its R&D pipeline, among which the marketing applications for Yipei growth hormone injection and the new clinical cure indication for adult chronic hepatitis B were accepted by the State Food and Drug Administration; Y-type polyethylene glycol recombinant human erythropoietin is being prepared for the Phase 3 clinical study. In addition, the company actively carries out foreign cooperation, introducing two products, Suzhou Alphamab Oncology KN069 and Fujiji Pharmaceutical NM6606, to lay out the treatment of liver fat metabolism and liver fibrosis.

Profit forecast and rating: It is expected that the company will achieve revenue of 37.46/49.19/6.145 billion yuan from 2025 to 2027, a year-on-year increase of 33.0%/31.3%/24.9%; net profit attributable to the parent company was 11.10/14.85/1.890 billion yuan, a year-on-year increase of 34.2%/33.7%/27.3%; Corresponds to 28.7/21.4/16.8 times PE. Based on the continuous expansion of the company's clinical application and the gradual enrichment of the product matrix, the company maintains a "buy" rating.

Risk warning: the risk of product price changes, the risk of intensified market competition, the risk of industry policy changes, and the risk that the R&D and approval progress of the pipeline under research is not as expected