Event
The company reported on August 27 that the company achieved HK $2.443 billion in revenue in the first half of 2021, an increase of 37.0% over the same period last year, with a gross profit margin of 60.2%, down 3.8% from the same period last year, and a net profit of HK $276 million, an increase of 11.6% over the same period last year.
Brief comment
After deducting the impact of equity incentives, revenue and profit increased significantly compared with the same period last year.
The company's operating income increased significantly in the first half of 2021 compared with the same period last year. Although the gross profit decreased slightly due to the price reduction of moxa Xingji, the gross profit still increased by 28.7% compared with the same period last year, and the net profit increased slightly compared with the same period last year. This is mainly due to an one-time non-cash fee of about HK $4213 arising from the grant of stock options to administrative staff in the first half of the year. If this part of the impact is flushed back, the net profit will increase to HK $318 million. Year-on-year growth will reach 28.6 per cent, close to gross profit growth. In the first half of the year, under the influence of the epidemic in Shijiazhuang, the company's performance still achieved substantial growth compared with the same period last year. According to the sub-section, the income from non-PVC soft bags and vertical soft bags was HK $1.06 billion, an increase of 36.8% over the same period last year. PP plastic bottle infusion income was HK $360 million, an increase of 21.5% over the same period last year. Glass bottle infusion income was HK $110 million, down 3.2% from the same period last year. The income of ampoule injection was 490 million Hong Kong dollars, up 66.1 percent over the same period last year; that of raw materials was 250 million Hong Kong dollars, up 147 percent over the same period last year; and that of medical materials was 81 million yuan, up 50.7 percent over the same period last year.
Multi-layer co-extruded biofilm breaks the import monopoly, with obvious first-mover advantages in the first half of 2021, the company developed a disposable liquid distribution system in line with the relevant requirements of the United States Pharmacopoeia USP level 6 and national standards, multi-layer co-extruded biofilm was put into industrial production and sales, the products are widely used in the field of vaccine and biological drug research and development and production, is currently the only domestic manufacturer that can replace imported biofilm. Disposable multi-layer co-extruded biofilm is the core raw material of downstream disposable bags and bioreactors, which was mainly monopolized by overseas manufacturers such as Renolit, ThermoFisher, Sealed air and so on, and Renolite accounted for the highest proportion in the domestic market. Under the background of COVID-19 epidemic situation, on the one hand, the production of COVID-19 vaccine has greatly increased the demand for disposable bags, resulting in a substantial increase in the demand for multi-layer co-extruded biofilms; on the other hand, overseas manufacturers have limited start-up and superimposed changes in shipping costs and timely efficiency. the supply of imported membrane materials is tight. The company has obvious advantages in breaking through the multi-layer co-extruded biofilm, and coincides with the tight supply of imported membrane materials, which provides a rare opportunity for the company to occupy the market.
Production capacity construction is in full swing, actively developing cell culture and bioreactor membranes to fill the supply gap and consolidate the first-mover advantage, the company has made every effort to expand biofilm production. Jiangsu Bosheng 1.6-meter-wide seven-layer biological barrier membrane new product is planned to be trial-produced by the end of the year and provide samples for customers to test. The company plans to put the second seven-layer barrier film production line into operation in June 2022, when the biofilm production capacity will be increased by 20 million square meters. At the same time, the company actively arranges new products and speeds up the development of cell culture bag membrane and bioreactor membrane with market forward-looking significance on the basis of perfecting the existing liquid storage bag membrane product series.
Join hands with domestic disposable biotechnology solution leaders
The company announced on July 23 that it signed a memorandum of strategic cooperation with Lechun Biology, which was founded in 2011 by Ms. Qin Sunxing and Mr. Wang Feng. it is the first high-tech enterprise in China specializing in disposable consumables and equipment. a leader in domestic disposable biotechnology solutions The products mainly include disposable bags and supporting products, disposable equipment systems, fluid management consumables, assembly systems, capsule sterilization filters and risk assessment and verification. As of December 2020, more than 500 biopharmaceutical companies in China have used Lechun biological products. The company signed a memorandum of strategic cooperation with Lechun Biology, which will provide assistance for the company's product research and development, production line construction and product volume.
Infusion products were gradually repaired, and ampoule water needles, APIs, and innovative drugs continued to advance in the first half of 2021. Under the influence of the COVID-19 epidemic, the company's infusion business still ushered in substantial repair, with a cumulative sales volume of 632.11 million bottles (bags), an increase of 31 percent over the same period last year; infusion sales reached 1.273 billion yuan, an increase of 19 percent over the same period last year; and peritoneal dialysate sales reached 468,000 bags, an increase of 1475 percent over the same period last year. In addition to the traditional infusion business, the company actively developed ambroxol hydrochloride injection, doxophylline injection and ropivacaine hydrochloride injection in ampoules, raw materials and other new products in the first half of 2021. Guangxiang Pharmaceutical caffeine sales of 1111 tons, a year-on-year increase, Guolong Pharmaceutical sales of azithromycin 128tons, also achieved rapid growth. In terms of innovative layout, the company's first innovative drug category 1 new drug NP-01 project completed sample preparation and comprehensively carried out clinical trial research. We will continue to promote the preliminary research of two kinds of new drugs, namely, AND-9, QO-83, and cisplatin, which are new drugs for liver fibrosis, antiepileptic compounds, and antineoplastic drugs. In terms of consistency evaluation, four products of ciprofloxacin lactate sodium chloride injection, fluconazole sodium chloride injection and metronidazole sodium chloride injection (100ml, 250ml) took the lead in passing the consistency evaluation in the industry in the first half of the year.
Profit forecast and investment rating
We are optimistic about the layout of chain membrane materials and infusion, ampoule water needle and API in the biopharmaceutical industry of the company. It is estimated that the operating income of the company in 2021-2023 will be 49.8,59.5 and 7.03 billion yuan respectively, and the net profit of returning home will be 7.3,10.1 and 1.2 billion yuan respectively, corresponding to 17.4,12.6,10.6 times of PE.
Risk analysis
Industry competition aggravates risks, product quality and risks related to downstream customer verification.