Luye Pharma Group (2186) H1 2024 earnings summary

Executive summary

• Revenue rose 5.9% year-over-year to RMB3,074.6 million for the six months ended 30 June 2024, driven by higher sales of key products.

• Net profit surged 201.4% year-over-year to RMB438.2 million, with profit attributable to shareholders up 158.5% to RMB387.8 million.

• EBITDA increased 33.3% year-over-year to RMB1,156.1 million.

• Earnings per share rose to RMB10.31 cents from RMB4.06 cents year-over-year.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit increased 7.0% year-over-year to RMB2,078.6 million, with a gross margin of 67.6%.

• Selling and distribution expenses fell 23.7% year-over-year, improving the expense-to-revenue ratio.

• Administrative expenses decreased 2.7% to RMB289.2 million.

• Finance costs dropped 9.5% to RMB277.8 million; effective tax rate was 17.3%.

• Gearing ratio increased to 60.2% from 55.3% at year-end 2023 due to higher borrowings.

Outlook and guidance

• The company expects stable growth from mature products and high sales growth from over 10 new products approved in the past three years.

• Focus remains on oncology, CNS, and cardiovascular areas, with several biologics and innovative drugs in the pipeline.

• Gross profit margin and net profit margin are expected to gradually improve as high-priced new products gain traction.

• NRDL inclusion and policy risk mitigation support stable growth in core segments.

• Margin improvement and net profit margin normalization are anticipated over the next three years.