The domestic growth hormone leader handed over the first year-on-year decline in annual revenue in nearly 20 years.

On April 20, Changchun High-tech (000661. SZ, share price 91.95 yuan, market value 37.51 billion yuan) at the same time released the 2024 annual report and the first quarter report of 2025, the company will achieve operating income of 13.466 billion yuan in 2024, a year-on-year decrease of 7.55%; The net profit attributable to the parent company was 2.583 billion yuan, a year-on-year decrease of 43.01%. In the first quarter of this year, the company achieved revenue of 2.997 billion yuan, a year-on-year decrease of 5.66%; The net profit attributable to the parent company was 473 million yuan, a year-on-year decrease of 44.95%.

In the first quarter, the company attributed the decline to higher sales-related expenses and higher R&D investment. However, after taking stock of the performance of the company's four main subsidiaries, the reporter of "Daily Economic News" found that Changchun High-tech "diversified expansion business" or hidden "crisis": the growth hormone business officially went downhill, the net profit of the vaccine business shrank all year round, and the real estate business continued to shrink.

However, the company is still relatively generous in terms of dividends, and the total amount of cash dividends and share repurchases accounted for 56.81% of the net profit in 2024.

The performance of the three subsidiaries declined

The number of sales personnel increased by nearly 60%.

Changchun's high-tech business is mainly divided into four major sectors: genetic engineering pharmaceuticals, biological vaccines, Chinese patent medicine and real estate, corresponding to four subsidiaries of Jinsai Pharmaceutical, Baike Biotechnology, Huakang Pharmaceutical and High-tech Real Estate.

In 2023, the revenue and net profit of Changchun High-tech will achieve growth across the board, and the income of the real estate business that failed to be divested will also be smoothly "increased". However, last year, the performance of the three subsidiaries of Changchun High-tech fell year-on-year. 2024 has also become the first year in the past 20 years that Changchun High-tech's annual operating income has declined year-on-year.

Among them, Jinsai Pharmaceutical, which sits on the growth hormone business, although its foreign sales revenue in 2024 will increase by 454% year-on-year to 99 million yuan, its total revenue will still decrease by 3.73% year-on-year to 10.671 billion yuan, and the net profit attributable to the parent company will be 2.678 billion yuan, a year-on-year decrease of 40.67%. This also means that Changchun High-tech's pillar business is declining in the domestic market.

100 grams of influenza vaccine, chickenpox vaccine and herpes zoster vaccine (688276. SH, share price of 21.83 yuan, market value of 9.03 billion yuan), in 2024, the revenue will be 1.229 billion yuan, a year-on-year decrease of 32.64%; The net profit attributable to the parent company was 232 million yuan, a year-on-year decrease of 53.67%, which was the third time that its revenue and profit fell during the four-year period of its spin-off and listing.

In addition, high-tech real estate achieved revenue of 756 million yuan, a year-on-year decrease of 17.32%; The net profit attributable to the parent company was 15 million yuan, a year-on-year decrease of 80.09%.

Huakang Pharmaceutical, the only important subsidiary that maintains positive performance growth, accounts for only single digits of Changchun High-tech's total revenue, and it is difficult to reverse the overall performance trend.

In order to cope with the decline, Changchun High-tech continued to increase investment in R&D and sales, mainly to accelerate the research and development of new products of Jinsai Pharmaceutical. Changchun high-tech R&D investment increased by 11.20% year-on-year to 2.690 billion yuan, accounting for 19.97% of revenue; Sales expenses increased by 11.81% year-on-year to RMB4.439 billion, further accelerating product sales promotion.

From the perspective of staffing, the company's sales staff will increase from 3,155 in 2023 to 4,995, an increase of nearly 60% year-on-year; The number of R&D personnel decreased from 1,329 to 1,264, a year-on-year decrease of 4.89%. At present, these investments have not translated into sufficient revenue growth, further squeezing the company's profits.

Terminate a U.S. filing

There are still a number of drugs approved for clinical trials in the United States

On June 8, 2020, the share price of Changchun High-tech reached an all-time high of 683.78 yuan, and since then it has been falling all the way, and the stock price has hovered around 90 yuan so far. Growth hormone is about to be included in centralized procurement, and the most important issue in the market is the monetization ability of the company's innovative products.

In the institutional survey in February this year, the company announced the progress of a number of key products. Among them, the Class 1.1 innovative drug Pediatric Gold Cough Granules has been approved for marketing in January this year; Furcincibarumab injection (aqueous agent, formerly known as kinakimab injection) for adult gouty arthritis has been declared for marketing in January this year; Vorcincibemab for injection (powder, formerly known as kinakimab for injection) was declared for marketing in April last year and is expected to be approved for marketing within this year.

The reporter noticed that the research and development progress of triptorelin acetate microspheres for injection for children with central precocious puberty has been delayed, and the estimated completion time has been postponed from June 30, 2025 to June 30, 2026.

The company's other four key products have just entered clinical trials, including two monoclonal antibody drugs, GenSci120 Injection, and GenSci098 Injection, the former for systemic lupus erythematosus, primary Sjögren's syndrome, inflammatory bowel disease (including ulcerative colitis and Crohn's disease), rheumatoid arthritis, the latter for the treatment of thyroid eye disease, and two chemical drugs GenSci122 tablets and GS1-144 tablets for advanced solid tumors and menopausal vasomotor disease, respectively.

It is worth mentioning that GenSci098 injection, GenSci122 tablets, and GS1-144 tablets have been approved for clinical trials in the United States.

Last year, Changchun High-tech decided to terminate the U.S. declaration of long-acting growth hormone after comprehensively considering factors such as clinical trial requirements, corresponding expected investment and time schedule, and the company made full provision for impairment of 133 million yuan of development expenditure that had been capitalized, which correspondingly reduced the operating profit of 133 million yuan in 2024.

Reporter Lin Zichen

Editor: Jin Mingyu, Yang Xia, Du Hengfeng

Proofreading Tang Yawen

Cover image source: Visual China

|National Business Daily nbdnews Original article|

Reprinting, excerpting, copying, mirroring, etc. without permission is prohibited