CSPC Pharmaceutical Group (1093) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 1.3% year-over-year to RMB16.28 billion, with finished drugs driving growth and bulk products and functional food segments declining; gross profit margin improved to 71.6%.

• Underlying profit attributable to shareholders increased 1.7% to RMB3.22 billion; reported profit rose 1.8% to RMB3.02 billion.

• Interim dividend per share increased 14.3% to HK16 cents; share buy-backs of HK$387 million completed, with a further HK$1,000 million approved.

• R&D investment rose 10.3% to RMB2.54 billion, supporting a robust pipeline of over 130 innovative drug projects and significant clinical progress.

• Two new innovative drugs approved in China; three candidates received clinical trial approval in North America.

Financial highlights

• Finished drug revenue grew 4.8% to RMB13.55 billion; bulk products fell 5.8% and functional food/others dropped 25.2%.

• Gross profit margin improved by 1.7 percentage points to 71.6%.

• R&D expenses increased 10.3% to RMB2.54 billion.

• Operating cash inflow was RMB1,425 million, up from RMB1,320 million in the prior year.

• Basic and diluted EPS based on underlying profit: 27.17 RMB cents (+2.2% year-over-year).

Outlook and guidance

• About 50 new drugs/indications are expected to be filed for marketing approval in the next five years.

• 20 generic drugs targeted for approval in 2024-2025, with 30 more in research for approval by 2027.

• Focus on expanding international presence, lower-tier market penetration, and advancing late-stage clinical assets.

• Share buy-back program of up to HK$1,000 million to be completed before the 2025 AGM.