1H21's net profit increased by 7.28% compared with the same period last year, with a target price of 12.72. it maintained the medium report released by the "overweight" rating company on August 23, achieving an income of 4.63 billion yuan (+ 11.64%yoy), a net profit of 595 million yuan (+ 7.28%yoy), and a non-net profit of 558 million yuan (+ 6%yoy). The steady situation is mainly due to the recovery of the infusion sector from the epidemic (income + 18%yoy). The income of specialist business was steady (+ 5%yoy), while that of chronic disease decreased slightly (- 10%yoy). Looking forward to 2H21, we expect further recovery of infusion business, new product winning bid collection or supply increment, raising the forecast of EPS in 21-22-23 to 1.06max 1.17max 1.26 yuan (the previous forecast for 21-22 years 1.05 pound 1.14 yuan), giving a 21-year PE12 times (due to the impact of the company's generic drug collection, 35% discount to comparable company Wind's 21-year average PE18), the target price is 12.72 yuan (13.65 yuan) Maintain the "overweight" rating.
Infusion plate: gradually recover from the epidemic situation, optimistic about structural optimization
The 1H21 income of the infusion plate is 1.34 billion yuan (an increase of 18.4% over the same period last year). The main reason is that the epidemic situation has obviously improved compared with the same period last year, and considering the recovery of hospitalization volume during the year, we are optimistic that the infusion plate will achieve an income growth of nearly 15% for the whole year, and the gross profit margin will continue to rise (1H21BFS 53.8% vs 2020: 49.4%). The main reasons: 1) as the company's exclusive variety, high value-added BFS is optimistic about continuing to replace low-end packing materials. 2) soft bags / plastic bottles / glass bottles are expected to achieve double-digit growth with the recovery of outpatient and hospitalization this year; 3) the proportion of therapeutic infusion varieties may gradually rise, and it is optimistic that the subsequent listing of new products will promote the gross profit margin of the infusion plate to rise; 4) the company leads the domestic channel, covering more than 2,000 commercial customers and 31 provinces and cities across the country.
Pharmaceutical sector: the performance of non-volume varieties is good, and the revenue of 1H21, which is maintained by specialist pharmaceuticals, is 3.26 billion yuan (an increase of 9.8% over the same period last year). We are still optimistic about double-digit growth for the whole year, mainly due to: 1) the 1H21 income of the chronic disease sector is 1.55 billion yuan (down 10% from the same period last year), and it is still expected to impact positive growth in 21 years. Non-volume core products are expected to stabilize this year, of which the core product No. 0 in the field of blood pressure reduction is expected to grow in single digits, nifedipine sustained-release tablets / Tangshiping / Nuobai are expected to grow by 30% this year, and are optimistic about Fusui Yue (1H21 sales volume is 1.8 times higher than that in the same period, income growth is 58%) and metformin sustained-release tablets in exchange for price. 2) the 1H21 income of the specialist sector is 650 million yuan (a year-on-year increase of 4.5%), and the income is expected to achieve double-digit growth in 21 years. In the field of pediatric medicine, Colisu and pediatric amino acids maintain the first market share. Nephrology / psychiatry is expected to maintain double-digit income growth for 21 years.
Strategic layout: focus on differentiated imitation varieties, open innovation strategy to face infusion recovery period and national collection, the company seeks strategic transformation: 1) the company relies on abundant cash flow and increases R & D investment (1H21 R & D expenditure is 180 million yuan, accounting for 3.90% of income) 2) build generic drug clusters (a total of 18 varieties have been reviewed at present, of which Preba capsules and valsartan hydrochlorothiazide tablets have won the bid for the fourth batch), pursuing differentiated categories (such as polypeptide technology and controlled release technology platform); 3) increase the distribution of innovative and biological drugs (the company has obtained the domestic rights and interests of Novita's oral drug Fascin protein inhibitor for tumor metastasis control, the current II phase clinical in the United States), endogenesis + epitaxy promotes the transformation.
Risk hint: the recovery of large infusion is not as expected, and the collection of varieties and price reduction are higher than expected.
