1H21 performance is in line with our expectations
The company announced 1H21 results: revenue of 1.9 billion yuan, an increase of 36.35% over the same period last year, net profit of 420 million yuan, an increase of 25.68% over the same period last year, and earnings per share of 0.46 yuan, an increase of 21.05% over the same period last year, in line with expectations. Development trend 1H21 performance is in line with expectations, product revenue returned to steady growth. From a quarterly point of view, the company's 1-2Q revenue growth rate was 44.5%, 29.5% year-on-year growth rate, and home net profit growth rate was 32.3%, 18.3%, respectively. Compared with the low base under the influence of the 1H20 epidemic, Compaq achieved an income of 660 million yuan, an increase of 56.0% over the same period last year. We expect its terminal volume to resume steady growth for the whole year, and chemical drug revenue of 680 million yuan. Year-on-year growth of 16.4%, proprietary Chinese medicine revenue of 550 million yuan, year-on-year increase of 47% sales and management expense rate decline, R & D expenses are affected by Compaq global multicenter clinical follow-up expenditure. 1H21's gross profit margin is 90.5%, which is basically the same as that of 1H20, which reduces 0.1ppt compared with the same period last year. The rate of sales and management expenses decreased significantly. The rate of 1H21 sales expenses decreased by 37.6% compared with the same period last year, reducing 9.2ppt by 8.5%, and reducing 3.0ppto 1H21 R & D expenses by 450 million yuan over the same period last year, an increase of 16.0%, accounting for 23.4% of income, and an increase in 16.0ppt over the same period last year, mainly due to the increase in R & D investment and the follow-up expenditure impact of Compaq global multicenter clinical trials.
IOPtima equity delivery was completed, and the early clinical pipeline was gradually enriched. The company announced the completion of the fourth phase of equity delivery of ophthalmic equipment company 1OPtima in June 2021, which further expanded the company's product line in ophthalmology and has some coordination with Compaq's department promotion and education. Combuxil for macular edema secondary to retinal vein occlusion has entered the NDA review stage in January 2021, and it has been approved by IND for retinopathy of prematurity. In ophthalmology pipeline, potential ophthalmic drug candidate KH906 eye drops has entered 1b clinic, Chinese patent medicine Keluoxin capsule for diabetic retinopathy IIb clinical is in progress; other pipelines, antineoplastic drug candidate molecule KH903 and therapeutic tumor vaccine candidate molecule KH901 have entered clinical phase 11, potential proprietary Chinese medicine KH110 for Alzheimer's disease is conducting clinical II phase research.
Profit forecast and valuation
Considering the change of the company's expense rate, my net profit in 2021 / 2022 is 4.9% 8.8% to 832 million yuan / 1.008 billion yuan. The current share price corresponds to 20.6 times 2021 / 2022 / 17.0 times earnings. Maintain a neutral rating and a target price of 24.00 yuan, corresponding to 26.5 times 2021 price-to-earnings ratio and 21.9 times 2022 price-to-earnings ratio, which has 28.8% upside space compared with the current stock price.
Risk.
The domestic volume of Compaq is lower than expected; the clinical progress is not as expected; the price reduction of health insurance negotiation is higher than expected.
