Huadong Medicine Co (000963) Q1 2024 earnings summary

Executive summary

• Achieved operating income of RMB 10.411 billion, up 2.93% year-over-year; net profit attributable to shareholders reached RMB 862 million, up 14.18% year-over-year.

• Net profit after deducting non-recurring items was RMB 838 million, up 10.66% year-over-year; adjusted net profit (excluding equity incentive and R&D institution P&L) was RMB 928 million, up 22.45%.

• Core subsidiary Zhongmei Huadong posted operating income of RMB 3.399 billion, up 10.53% year-over-year, and net profit of RMB 751 million, up 11.67%.

Financial highlights

• Operating revenue increased 2.93% year-over-year to RMB 10.41 billion.

• Net profit attributable to shareholders rose 14.18% year-over-year to RMB 862 million.

• Basic EPS was RMB 0.4929, up 14.20% year-over-year.

• Net cash flow from operating activities was negative RMB 484.5 million, down 96.84% year-over-year due to higher purchases and employee payments.

• Total assets at quarter-end were RMB 34.47 billion, up 2.86% from year-end 2023.

Outlook and guidance

• Pharmaceutical business segment expected to return to positive growth in Q2 after a Q1 revenue decline due to a high base last year.

• Aesthetic medicine segment and industrial microbiology business anticipated to accelerate growth, supported by new product launches and market expansion.