Events:
According to the company's mid-2022 report, the company's operating income in the first half of 2022 was 3.312 billion yuan, down 5.01% from the same period last year; the operating profit was 385 million yuan, down 26.16% from the same period last year; the total profit realized was 406 million yuan, down 23.94% from the same period last year; and the net profit belonging to shareholders of listed companies was 352 million yuan, down 19.56% from the same period last year.
Comments:
During the reporting period, the income of the company's traditional Chinese medicine formula granule and prepared slices business was 1.629 billion yuan, a decrease of 9.50% compared with the same period last year, a gross profit margin of 65.10%, a decrease of 3.31% over the same period last year, and a revenue of 420 million yuan for medical device products, a decrease of 25.77% compared with the same period last year. Gross profit margin was 41.07%, an increase of 1.70% over the same period last year The revenue of the pharmaceutical equipment wisdom supply chain business reached 398 million yuan, an increase of 54.28% compared with the same period last year, with a gross profit margin of 22.21%, a decrease of 4.64% over the same period last year.
The formula particles are in the national standard switching period, which leads to the short-term pressure on the related business of the company. The company's formula granule business showed negative growth compared with the same period last year, mainly because the formula granule entered the stage of switching from enterprise standard to national standard and provincial standard in the first half of the year, and the downstream terminals had more enterprise target inventory before switching standards. as a result, the progress of the sales terminals in some areas to switch products from enterprise standards to national standards is affected, which in turn affects the volume of the company's formula particles. At the same time, at present, the national standard for traditional Chinese medicine formula granules is 200, which can not fully meet the daily needs of patients in clinic, resulting in restrictions on doctors in prescribing formula granules; in the first half of the year, many places have been affected by the epidemic, which has also delayed the company's progress in promoting product switching in various places. We believe that the formula granule business is about to reach an inflection point and resume positive growth in the quarter. At present, the progress of the company in promoting the standard switching in the product sales area is in line with expectations, which has laid the foundation for the release of the company's products; with the acceleration of the policy pace of the provinces in promoting the national and provincial standards of formula granules, doctors will also become familiar with prescribing new standard formula granules. At the same time, we believe that as local policies to deal with the epidemic become more mature, the number of hospital stoppage due to the epidemic will be less than that in the first half of the year, and the impact of the epidemic on the formula granule business will be reduced. With the smooth switching of standards, the improvement of doctors' familiarity, the reduction of the impact of the epidemic and other factors, we believe that the formula granule business is now at the bottom of the region, is about to have an inflection point, ushered in a rebound in performance.
In the medical device sector, the company continued to speed up the establishment, research and development of new products and the listing of new products. In the first half of 2022, 10 product certifications were completed, 8 new products were listed on the market, and 1 trial production was carried out. We are optimistic that the company will continue to improve the efficiency of the supply chain, promote technology cost reduction, and improve product profitability. In terms of Xuebijing injection, the company has further focused on the development of uncovered hospitals, strengthened the development and management of the grass-roots market of chemical products, and promoted steady growth in performance; pharmaceutical equipment wisdom supply chain business plate, the cooperation between the company and relevant hospitals has also been launched and entered the implementation stage.
Profit forecast and investment rating: in the long run, the number of formula particles on the supply side will continue to grow, and the further liberalization of the sales terminal on the demand side will also accelerate the market expansion and penetration of formula particles.
In terms of competition pattern, the introduction and implementation of GB is also more beneficial to Hongri Pharmaceutical and other enterprises that have long-term accumulation in the formula particles. Other businesses are also expected to maintain steady growth. We estimate that the company's revenue from 2022 to 2024 is expected to reach 80.97yuan, 102.75 yuan, 12.166 billion yuan, and net profit is expected to reach 7.00,10.24,1.218 billion yuan, corresponding to EPS 0.23,0.34,0.41 yuan respectively, maintaining a "highly recommended" rating.
Risk hint: the promotion of industry policy is not as expected, the speed of market development is not as fast as expected, and the risk of raw material cost change.