Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 5.30 [1] Core Views - The company's 1-9M24 revenue was HKD 4.534 billion (-4.7% YoY), with a net profit of HKD 919 million (-2.8% YoY) [2] - The decline in revenue was attributed to stable growth in the large infusion sector but was offset by the impact of centralized procurement on ASP and a one-time impact from a specific product [2] - The net profit margin improved by 0.4 percentage points YoY due to optimized sales expenses [2] - The report expects the company's 2024 net profit to be HKD 1.35 billion, driven by seasonal demand in the large infusion sector and stabilized raw material prices [2] Large Infusion Sector - The large infusion sector generated HKD 2.97 billion in revenue (-1% YoY) in 1-9M24, with a 13.4% YoY increase in sales volume but a 12.7% YoY decline in ASP due to centralized procurement [3] - The sector is expected to grow steadily in 2024, with sales exceeding 2.2 billion bottles/bags, driven by seasonal demand, increased capacity utilization, and the expansion of high-margin products like peritoneal dialysis fluid [3] Raw Material Sector - The raw material sector reported HKD 598 million in revenue (-6.6% YoY) in 1-9M24, with caffeine prices stabilizing and azithromycin expected to see both volume and price increases in 2024 [4] - The ampoule sector saw a significant revenue decline (-30.5% YoY) due to a one-time impact but is expected to recover with HKD 700 million in revenue in 2024 [4] Solid Formulation Sector - The solid formulation sector achieved HKD 339 million in revenue (+5.3% YoY) in 1-9M24, with expected revenue of HKD 500 million in 2024 due to new product approvals and the deepening of the raw material/formulation integration strategy [4] Financial Forecasts and Valuation - The company's 2024/2025/2026 EPS is forecasted to be HKD 0.46/0.53/0.59, with a target price of HKD 5.30 based on a 10x PE ratio for 2025 [5] - Revenue is expected to grow from HKD 6.528 billion in 2024E to HKD 8.386 billion in 2026E, with net profit increasing from HKD 1.354 billion in 2024E to HKD 1.744 billion in 2026E [1][5] - ROE is projected to remain stable around 18.45%-18.84% from 2024E to 2026E [1]
石四药集团：大输液销量稳定增长，原料药价格企稳