Performance summary: The company achieved operating income of 260 million yuan (+28.9%) in the first half of 2021, achieved net profit of 40.22 million yuan (+49.2%), and achieved net profit of 31.88 million yuan (+62.4%) after deducting non-return mother's net profit.
A number of new products are growing rapidly, and sales in the biomaterials sector are steady. The biomaterials sector is the company's dominant area. In recent years, it has continued to dig deeper into the market, achieving revenue of 170 million yuan. Among them, Guanlang, a next-generation meningeal product, increased 134.0% over the same period last year; general thoracic surgery repair membranes increased 59.6% over the same period last year; sterile bioinvasive protective films increased 105.7% over the same period last year; and breast patches increased 164.7% over the same period last year.
The marginal impact of volume procurement has been reduced, and the ophthalmology sector has been growing steadily. The ophthalmology sector achieved revenue of 54.6 million yuan, and the gross margin of artificial lenses was 63.7% (+8.9pp). Volume procurement and cross-provincial alliance procurement have already covered most provinces this year. Xiangle Airui series artificial lens products have won multiple bids in almost all joint procurement tenders, greatly increasing market share; Aishumin series products have been fully promoted in the national market, and sales have steadily increased in various regions. In terms of introducing new products, clinical trials of TEKIA intraocular lenses in the US have been completed, and preparations for submission of registration data have begun.
Benvermode is negotiating prices for health insurance, and promotion continues. The pharmaceutical sector's revenue was 21.3 million yuan, and the gross margin was 75.1% (-10.0 pp). Benvermode cream successfully entered the national Class B medical insurance catalogue. Medical insurance and new prices were implemented on March 1, 2021. The new price drop reached 72%. The price drop had a certain impact on sales revenue, but the cost performance ratio was prominent, which is more conducive to the drug's broad clinical coverage.
Maintain a “buy” rating. The company's net profit for 2021-2023 is estimated to be 0.7/0.9/110 million yuan, EPS is 0.28/0.35/0.41 yuan respectively, and the corresponding PE is 66X/53X/45X. The company's various sectors are growing well. Biomaterials and new ophthalmology products are driving overall performance growth, and Benvermode's coverage is expected to increase dramatically after entering medical insurance. Maintain a “buy” rating.
Risk warning: The risk that Benvimode will fall short of expectations, that the purchase of consumables will not win the bid or that the price reduction exceeds expectations, and the risk of R&D failure.