Luye Pharma Group (2186) H2 2024 earnings summary

Executive summary

• Revenue declined by 1.3% year-over-year to RMB6,061.4 million, mainly due to lower non-product sales, while product sales rose 1.1%.

• Net profit increased 19.6% to RMB645.0 million, with profit before tax up 19.9% to RMB839.2 million year-over-year.

• EBITDA grew 5.5% to RMB2,191.7 million, but profit attributable to shareholders fell by RMB60.7 million.

• No dividend was proposed for the year.

Financial highlights

• Gross profit decreased 3.8% to RMB4,044.2 million, with gross margin at 66.7% (down from 68.4%).

• Selling and distribution expenses dropped 11.7% to RMB1,816.4 million; administrative expenses fell 9.6% to RMB582.0 million.

• Finance costs decreased 16.8% to RMB561.8 million; effective tax rate was 23.1%.

• Net current assets stood at RMB2,539.0 million; current ratio at 1.24.

• Gearing ratio improved to 52.7% from 55.3% year-over-year.

Outlook and guidance

• Product sales rebounded in H2 2024, up 4.0% over H2 2023 and 7.2% over H1 2024.

• High sales growth expected from over 10 new products approved in the last three years.

• Focus on expanding sales teams, optimizing sales models, and increasing investment in innovative drugs.

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