A 10.68% year-on-year increase in net profit is just the surface. Is Haisco Pharmaceutical Group actually moving forward under pressure?
Hisun Pharmaceutical "walks on multiple legs," with soaring revenue but slowing profit growth.
Source｜Pharmaceutical Research Society
Since its IPO in April 2023, active pharmaceutical ingredient (API) company Hisun Pharmaceutical (001367) has delivered several impressive "report cards," demonstrating operational resilience by achieving growth against industry headwinds.
However, peeling back the growth facade reveals the company is indeed under pressure.
Recently, Hisun Pharmaceutical released its Q3 2024 financial report. The data shows the company's Q3 operating revenue reached 109.4 million yuan, a significant year-on-year increase of 21.83%; net profit attributable to shareholders was 28.91 million yuan, up 10.68% YoY.
With net profit growth notably lagging behind revenue growth, Hisun still bears considerable profitability burdens.
I. "Walking on Multiple Legs" Charts Growth Path
Hisun's Q3 performance momentum continued its H1 2024 trajectory.
Per the report, H1 2024 revenue hit 210 million yuan (+8.93% YoY), with net profit at 58.04 million yuan (+26.7% YoY).
Within the API sector, Hisun's position appears favorable. Tonghuashun data shows 29 of 45 A-share API companies reported negative growth in H1 (64.44%).
Hisun's growth logic is clear: a "multi-product, multi-region" strategy stabilizes its foundation.
Product-wise, Hisun operates across digestive, analgesic, cardiovascular, antidepressant, and antibacterial APIs/intermediates, while expanding into formulations to drive "API + formulation" integration.
This is reflected in H1 data: formulation revenue surged 95.54%, becoming the fastest-growing among core businesses. Enhanced synergies should further brighten growth prospects.
Geographically, with global API market projected to reach $363.7 billion by 2032 (Qianzhan Industry Research), Hisun balances domestic (58.23% of H1 revenue) and international (41.77%) markets to expand growth space.
Overall, "walking on multiple legs" maintains Hisun's growth, but can it sustain diversification amid rising costs?
II. Cost Risks Loom in Expansion
Long-term, diversification grows more critical as industry challenges intensify.
First, tightening drug regulations necessitate product optimization. Hisun's analgesic API analgin, despite affordability and efficacy, faces restrictions due to side effects like organ damage. China's 2020 analgin injection ban and overseas limitations pose risks, prompting Hisun to reduce reliance on this product.
Second, with 1,661 API manufacturers in China (NMPA 2023 data), overseas expansion becomes imperative. However, broadening operations escalates costs—Q3 R&D expenses rose 43.61% to 17.83 million yuan, pressuring profit margins despite growth.
While profit-taking is long-term, slowing growth signals caution for smaller players like Hisun.
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