Jinhe Biotechnology(002688) 华升证券·2024-05-30 08:00Investment Rating - The report gives a "Buy" rating for the company with a target price of 7.02 CNY, indicating a potential upside of 42.68% from the last closing price of 4.92 CNY [5][161]. Core Insights - The company is the largest producer of veterinary gentamicin globally, with a production capacity of 55,000 tons per year, accounting for 51% of the global capacity. The upcoming sixth-phase project is expected to add 60,000 tons of capacity, enhancing cost efficiency and expanding product offerings [1][81]. - The company has a comprehensive product layout, including over 15 vaccine varieties and more than 20 in development, positioning itself as a leader in the veterinary vaccine market. The African swine fever vaccine is currently in the efficacy evaluation stage, which could significantly boost the vaccine segment [8][127]. - The company has established a strong presence in both domestic and international markets, with overseas sales accounting for approximately 60.49% of its total sales [82]. Summary by Sections Company Overview - The company has been focused on the production and research of gentamicin for over 30 years and has expanded its product lines to include veterinary vaccines and environmental services [22][1]. - The company operates four main business segments: veterinary pharmaceuticals, vaccines, environmental services, and agricultural processing, with clear roles for its subsidiaries [29][137]. Market Growth and Demand - The veterinary pharmaceutical market is expected to grow significantly, driven by the recovery of the livestock industry and the introduction of new products. The market for veterinary vaccines is projected to expand, particularly with the ongoing development of the African swine fever vaccine [191][127]. - The company’s revenue from veterinary pharmaceuticals was 1.016 billion CNY in 2023, showing a year-on-year growth of 3.27% [29]. Financial Performance - The company achieved a total revenue of 2.174 billion CNY in 2023, with a year-on-year increase of 2.42%. The net profit attributable to shareholders was 86 million CNY, reflecting a growth of 14.34% [30][184]. - The projected revenues for 2024-2026 are 2.509 billion CNY, 2.906 billion CNY, and 3.377 billion CNY, respectively, with corresponding net profits of 207 million CNY, 292 million CNY, and 391 million CNY [9][160]. Competitive Advantages - The company benefits from a strong cost structure due to its location in a major corn-producing area, which provides a competitive edge in raw material costs [84]. - The sixth-phase project is expected to enhance production efficiency and reduce costs further, allowing the company to maintain a leading position in the market [79][87]. Future Outlook - The company is well-positioned for future growth with its innovative product pipeline and expansion into new markets. The anticipated approval of the African swine fever vaccine could significantly enhance its market position [127][161]. - The environmental and agricultural processing segments are also expected to contribute positively to the overall revenue growth, with steady increases in both segments observed in recent years [139][142].