The Science and Technology Innovation Board has become a gathering place for "hard technology" pharmaceutical enterprises. With the release of annual reports from relevant enterprises, there is also the latest reference data on their research and development situation. According to data from Dongfang Wealth Choice, among 105 pharmaceutical and health companies listed on the Science and Technology Innovation Board, BeiGene (688235) had a far leading R&D expense of over 10 billion yuan in 2023, with R&D expenses exceeding 1 billion yuan for four stocks including Junshi Biotechnology and Lianying Medical. In terms of the proportion of R&D expenses, 15 stocks including Junshi Biotechnology have a R&D expense ratio of over 100%, while Shanwaishan has the lowest R&D expense ratio of only 5.46%, and 17 stocks have a R&D expense ratio of less than 10%. From the perspective of R&D expense growth, 37 companies experienced a year-on-year decline in R&D expenses in 2023, with the number of declining stocks accounting for over 30%. Among them, the R&D expenses of Anxu Biotechnology and Jindike decreased by more than 50% year-on-year.
BeiGene's R&D expenses rank first
In 2023, BeiGene has the highest research and development expenses among pharmaceutical companies on the Science and Technology Innovation Board, and is far higher than other companies.
According to data from Dongfang Wealth Choice, there are a total of 105 science and technology innovation board companies in the pharmaceutical and health sector of the China Securities Industry Classification (2021). In 2023, the total R&D expenses were 38.185 billion yuan, with an average R&D expense of 364 million yuan.
Under the above statistical dimensions, BeiGene has the highest R&D expenses of 12.813 billion yuan in 2023, and is also the only enterprise with R&D expenses exceeding 10 billion yuan. Compared with the same period last year, BeiGene's R&D expenses increased by 14.9%, and the company's R&D investment was used for preclinical research, clinical trials, and collaborative research and development of product pipelines. Among them, clinical research and service fees are the highest amount of research and development expenses in BeiGene, with a total of 4.21 billion yuan.
After entering BeiGene, Junshi Biotechnology, Lianying Medical, Rongchang Biotechnology, and Shenzhou Cell have R&D expenses of over 1 billion yuan in 2023, totaling 1.937 billion yuan, 1.729 billion yuan, 1.306 billion yuan, and 1.148 billion yuan, respectively. A total of 62 enterprises have annual R&D expenses exceeding 100 million yuan, accounting for approximately 59.05%.
Jindike, Kangtuo Medical, and Seckohid ranked last among the 105 companies in 2023 in terms of research and development expenses, with approximately 15.47 million yuan, 17.64 million yuan, and 19.18 million yuan respectively.
Zhang Xiaorong, President of the Deep Science and Technology Research Institute, stated that research and development innovation is the core of the long-term development of enterprises. Long term R&D investment is beneficial for cultivating the core competitiveness of enterprises. The increase in R&D expenses by the company helps to increase valuation, promote innovative development, and enhance corporate performance.
According to Yang Haiping, a researcher at the Securities and Futures Research Institute of Central University of Finance and Economics, the development of the pharmaceutical industry relies heavily on technological research and development. If listed pharmaceutical companies want to maintain their industry position, enhance their refinancing capabilities, and enhance their overall strategy of relying on the capital market to promote industry integration, increasing R&D investment is the core and key. Continuously increasing R&D investment is also a key lever for companies to establish a moat to block potential competitors and improve valuation levels.
The lowest R&D cost rate is found in the mountainous areas outside the mountains
From the perspective of R&D expense ratio, according to data from Dongfang Wealth Choice, in 2023, 15 of the above-mentioned enterprises had R&D expense ratios exceeding 100%, mostly "U" target enterprises that have not yet achieved profitability.
Zhixiang Jintai has the highest R&D expense ratio. In 2023, Zhixiang Jintai achieved a revenue of approximately 1.212 million yuan, and the company's current R&D expenses were 620 million yuan, far exceeding the revenue. Zhixiang Jintai has a relatively young stock age, and the company was listed on the Science and Technology Innovation Board on June 20, 2023, but has not yet achieved profitability. In 2023, the net profit attributable to Zhixiang Jintai was -801 million yuan. In the first quarter of 2024, the company's net profit showed a year-on-year decrease of -164 million yuan.
Many companies with high R&D expense ratios are similar to Zhixiang Jintai, with several unprofitable companies such as Shouyao Holdings, Yahong Pharmaceutical, and Dizhe Pharmaceutical having R&D expenses far higher than operating revenue in 2023. Among the top 10 companies with a research and development expense ratio, only Kangxinuo has achieved profitability. Among the 11-15 companies, Rongchang Biotechnology and Biotech are non "U" standard enterprises.
In addition to the 15 stocks mentioned above, in 2023, the R&D expense ratio of 5 stocks including BeiGene, Tianzhihang, and Shenzhou Cell exceeded 50%, while the R&D expense ratio of 27 stocks including Huiyu Pharmaceutical and Shuoshi Biotechnology was between 20% and 50%, and the R&D expense ratio of 17 stocks was less than 10%.
Shanwaishan has become the enterprise with the lowest R&D expense rate in 2023, at 5.46%. In 2023, Shanwaishan achieved a revenue of approximately 690 million yuan, a year-on-year increase of 80.65%; The corresponding net profit attributable to the company was approximately 195 million yuan, a year-on-year increase of 228.34%. The company's research and development expenses were approximately 37.67 million yuan, a year-on-year increase of 62.86%.
In addition, Bide Pharmaceuticals, Jiete Biotechnology, Nuohe Zhiyuan, and Shanghai Yizhong also ranked lower in their R&D expense rates in 2023, with rates of 5.79%, 6.16%, 6.2%, and 6.23%, respectively.
Anxu Biological's R&D expenses have dropped the most sharply
From the perspective of changes in research and development expenses, according to data from Dongfang Wealth Choice, over 30% of pharmaceutical companies on the Science and Technology Innovation Board experienced a year-on-year decline in research and development expenses in 2023.
Specifically, among the aforementioned enterprises, 68 of them saw a year-on-year increase in R&D expenses in 2023, accounting for approximately 64.76%. 37 companies experienced a year-on-year decline in R&D expenses in 2023, accounting for approximately 35.24%.
Anxu Biotechnology has become the stock with the largest decrease in research and development expenses. Anxu Biotechnology's research and development expenses in 2023 were 105 million yuan, and in 2022 they were 329 million yuan, a year-on-year decrease of 68.01%. The R&D expenses of Jindike were approximately 15.47 million yuan in 2023 and 32.41 million yuan in 2022, a year-on-year decrease of 52.26%. In addition, the R&D expenses of Dongfang Biotechnology, Zhijiang Biotechnology, Aotai Biotechnology, and Shengxiang Biotechnology decreased by more than 40% year-on-year.
The Beijing Business Daily reporter noticed that among the stocks with declining R&D expenses, most are performance pressure stocks. Among the top 10 stocks with a decrease in R&D expenses, only Innot ranked 9th with a net profit growth in 2023. For example, Anxu Biotechnology stated in its 2023 annual report that the decrease in R&D expenses was mainly due to a decrease in the company's operating revenue and a reduction in total R&D investment. Financial data shows that in 2023, Anxu Biotechnology achieved a revenue of approximately 503 million yuan, a year-on-year decrease of 91.84%; The corresponding net profit attributable to the company was approximately 142 million yuan, a year-on-year decrease of 95.35%. However, in the first quarter of this year, Anxu Biotechnology's performance rebounded, achieving a revenue of approximately 129 million yuan during the reporting period, a year-on-year increase of 6.53%; The corresponding net profit attributable to the company was approximately 70.19 million yuan, a year-on-year increase of 38.09%.
Jindike's net profit in 2023 turned from profit to loss. Financial data shows that in 2023, Jindike achieved a revenue of approximately 135 million yuan, a year-on-year decrease of 57.74%; The corresponding net profit attributable to the company was approximately -70.99 million yuan, a year-on-year decrease of 270.88%. In the first quarter of this year, Jindike achieved a revenue of approximately 5.018 million yuan, a year-on-year decrease of 95.28%; The corresponding realized attributable net profit was approximately -21.49 million yuan, a year-on-year decrease of 159.13%.
Shanghai Yizhong, Mengke Pharmaceutical, and Baili Tianheng were among the top stocks in terms of R&D expense growth in 2023, with year-on-year increases of 183.26%, 129.31%, and 98.98%, respectively.