Jiuzhou Pharmaceutical(603456) 浙商证券·2024-09-13 10:03Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company is expected to see long-term performance driven by the continuous growth of its CDMO projects, with future flexibility anticipated from the TIDES business [2] - The company's revenue and profit have declined, with H1 2024 revenue at 2.764 billion yuan (down 15.07% YoY) and net profit at 475 million yuan (down 23.62% YoY) [2][3] Summary by Sections Performance Overview - In H1 2024, the company achieved revenue of 2.764 billion yuan (YoY -15.07%), with a net profit of 475 million yuan (YoY -23.62%) and a non-recurring net profit of 468 million yuan (YoY -23.66%). In Q2 2024, revenue was 1.289 billion yuan (YoY -14.29%) and net profit was 238 million yuan (YoY -30.18%) [2][3] Business Breakdown - CDMO: Revenue in H1 2024 was 1.971 billion yuan (YoY -20.61%), with a 14% increase in the number of new projects. The company has undertaken 34 listed projects and 81 Phase III clinical projects, with a total of 988 projects in Phase I and II clinical trials [3] - API and Intermediates: Revenue in H1 2024 was 732 million yuan (YoY +5.56%), with a gross margin of 21.19%, which has decreased due to price fluctuations in the intermediates and API industry [3] Profitability - In Q2 2024, the gross margin was 36.55% (down 3.61 percentage points YoY) and the net margin was 18.58% (down 4.16 percentage points YoY). The management expense ratio decreased by 2.28 percentage points, while the R&D expense ratio increased by 1.51 percentage points [4] Earnings Forecast and Valuation - Due to price fluctuations in the API and intermediates market, the earnings forecast for 2024-2025 has been revised downwards. The expected EPS for 2024, 2025, and 2026 is 1.17 yuan, 1.33 yuan, and 1.51 yuan respectively. The closing price on September 12, 2024, corresponds to an 11x PE for 2024 [5]