Key points of investment
Incident: Recently, Ganli Pharmaceutical released its 2021 annual report and 2022 quarterly report. In 2021 as a whole, the company achieved operating income of 3.612 billion yuan, an increase of 7.44% over the previous year; achieved net profit of 1,453 billion yuan, an increase of 18.04% over the previous year; and achieved net profit of 1,343 million yuan after deducting non-return mother's net profit of 1,343 million yuan, an increase of 11.51% over the previous year. In Q1 2021, the company achieved operating income of 690 million yuan, an increase of 25.77% over the previous year; achieved net profit of 113 million yuan, a decrease of 40.39% over the previous year; and achieved net profit of 155 million yuan after deducting non-return to the mother, an increase of 47.57% over the previous year.
Profit prediction and valuation: As the first Chinese company to successfully develop, produce and industrialize recombinant insulin analogs in China, the company has long been in a leading position in the domestic third-generation insulin industry. With the company's active layout in overseas markets in recent years, its competitiveness in the international market has continued to improve, which is expected to usher in new performance growth points. At the same time, competition in the domestic diabetes medication pattern is intensifying, and bioanalogues face the risk of being collected and reduced in price. We adjusted our profit forecast for the company. It is estimated that the company's EPS for 2022-2024 will be 2.73, 3.18, and 3.89 yuan respectively, and that the stock price corresponding to PE on April 28, 2022 will be 14.7, 12.6, and 10.3 times, respectively, maintaining the “prudent increase in holdings” rating.
Risk warning: risk of price reduction in insulin collection; insulin sales falling short of expectations; development of new products is progressing slower than expected; overseas market development falls short of expectations; risks related to centralized procurement; impact of public health events.