occurrences
On April 28, 2022, the company disclosed its report for the first quarter of 2022. The company achieved operating income of 249 million yuan in the first quarter of 2022, an increase of 16.10% over the previous year, and net profit attributable to shareholders of listed companies was 308.793 million yuan, an increase of 21.73% over the previous year. Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 29.727,500 yuan, an increase of 19.55% over the previous year. Basic earnings per share were $0.1868 per share.
Incident reviews
“234 R&D pattern formation”, building innovative traditional Chinese medicine R&D pipeline companies with independent research and development as the main focus, gradually forming a “234” R&D pattern: “2” has R&D offices in Shanghai and Guiyang, “3” has established the three major R&D bases of Shanghai Haitian Pharmaceutical, Shanghai Shuofang Pharmaceutical, and Guiyang Xintian Pharmaceutical, and “4” is a systematic construction of the Shanghai New Chinese Medicine Innovation Research Center, Shanghai Shuofang Pharmaceutical, Guiyang Technology Center, and Shanghai Product Medical Research Department. Products/projects that have been completed and are being developed by the company include: (1) the company has completed phase III clinical research on three varieties, including Pelvic Healing Granules, Shugang Jieyin capsules, and will submit marketing license applications one after another based on the actual situation; (2) Research on classic traditional Chinese medicine recipes involving gynecology, pediatrics, geriatrics, and respiratory medicine is being carried out, and it is planned to submit marketing license applications one after the relevant departments release key information on the corresponding formulations; (3) continue to carry out the company's key cultivars, Taikul capsules, Ningbitai capsules, bitter ginseng gels, and Xia gels Clinical medical research on herbal oral liquid, conducted on related products Secondary development.
Product brand advantages are initially reflected. The three-year performance doubling plan is steadily progressing. The company has 32 drug production approvals, including 10 Chinese medical insurance catalogue varieties, 1 national essential drug catalogue variety, 12 OTC (OTC) varieties, and 12 exclusive varieties. Among them, many major varieties such as Kuntai capsules, Ningbitai capsules, and bitter ginseng gel have achieved a market size of over 100 million per product. The market share of major gynecological products in medical institutions and retail pharmacies has continued to increase, and the market share of major gynecological products in medical institutions and retail pharmacies has continued to increase. In 2022, the company has formulated a more detailed and in-depth performance growth strategy and action plan. On the basis of business growth compared to 2021, the company will further increase the “breadth, depth and fineness” of clinical sales, continue to increase product coverage in grade hospitals and primary markets, increase medical promotion efforts, increase the output of individual hospitals, strive to achieve the second annual performance target of the “three-year multiplication plan”, and strive to exceed the 2022 target tasks.
Clinical marketing results have been remarkable, and the OTC market continues to be covered
Clinical sales is the company's key marketing channel. The company has implemented a series of marketing agency and system reforms. Under the effective impetus of the equity incentive plan, the company fully implemented an assessment mechanism combining responsibilities, tasks and incentive policies to promote channel development capabilities, strengthen the fine management of terminal business, and enhance single-person, single-hospital and single-store output; in conjunction with the hospital market currently covered, the company has iteratively strengthened product promotion in the fields of gynecology lines and andrology lines based on existing product clusters; in addition, the company has set up a special variety marketing team to further explore the promotion of second-tier varieties. Through a combination of these measures, remarkable results have been achieved at the implementation level of the business growth plan. The company's OTC market layout began in 2018. In less than 4 years, by the end of 2021, the company's OTC market had covered more than 90,000 pharmacies in 30 provinces and cities across the country, an increase of 12% over 2020; it covered nearly 800 major pharmaceutical chain companies and continuously strengthened the cooperative relationship between the two parties. The yield of pharmaceutical stores increased 26.4% compared to 2020. The company will also increase sales investment in Internet channels, speed up the construction and operation of media channels, especially the construction of new media, distribute and distribute the company's product promotions through media channels, accurately reach consumers, and comprehensively help brand building.
Investment advice
We expect the company's revenue for 2022-2024 to be 1,322/16.90/2,095 billion yuan respectively, up 36.3%/27.8%/24.0%, respectively. Guimu's net profit was 135/187/243 million yuan respectively, up 34.7%/37.7%/30.3% year-on-year respectively. The corresponding PE was 15.91/11.55/8.87X.
Considering the company's stable product structure, good competitive pattern, rich R&D pipeline, continuous penetration of OTC channels, and equity incentive plans that guarantee a three-year increase in performance, we maintain the “buy” investment rating.
Risk warning
Industry policy risks; product development risks; drug sales uncertainty, etc.
