Event: on August 19, Tailong Pharmaceutical released the "2022 semi-Annual report". 2022H1 achieved a total operating income of 864 million yuan, an increase of 14.9% over the same period last year. The net profit returned to the mother was-25.43 million yuan, and the non-net profit was deducted from the mother-15.33 million yuan. Basic EPS-0.0452 yuan per share. At the same time, the company also issued the "Business decision Committee meeting system", "General Manager's working rules" and "subsidiary Management system".
Product by product: 1) due to the influence of epidemic prevention and control policy, the sales of core products are limited, with revenue of 185 million yuan, a decrease of 23.4% over the same period last year; gross profit margin of 48.1%, an increase of 4.7 pct over the same period last year; 2) due to the impact of increased sales and price adjustment, revenue of traditional Chinese medicine prepared slices business reached 444 million yuan, an increase of 33.3% over the same period last year; gross profit margin was 10.8%, down 2.2% from the same period last year 3) due to business expansion and increased production capacity, the pharmaceutical R & D service business achieved 170 million yuan in revenue, up 25.3% from the same period last year; gross profit margin was 40.4%, down 4.8 pct;4 from the same period last year.) the volume of pharmaceutical material circulation business was small, with revenue of 60 million yuan, an increase of 45.6% over the same period last year.
In a single quarter, Q2 realized revenue of 441 million yuan, net profit of-27.76 million yuan, and non-return net profit of-17.78 million yuan. Q2 sales gross profit margin is 18.6%, year-on-year reduction of 7.6 pct; sales\ management\ R & D\ financial expense rates are 5.3%\ 6.7%\ 5.7%\ 3.6% respectively, year-on-year-3.2 pct\-2.8 pct\ + 1.5 pct\-3.0 pct; net sales margin-6.0%, down 6.4 pct year-on-year. Due to the change of business structure, the profit margin decreased significantly in the second quarter compared with the same period last year, but the overall cost management efficiency improved and R & D investment increased. In order to alleviate the problem of dependence on a small number of core products in the second quarter, the company applied to supplement five pharmaceutical products, such as Huoxiang Zhengqi mixture, Shengmai Yin (Dangshen Fang), Wuzi Yanzong Oral liquid, Banlangen syrup and Honeysuckle Dew. and recently received the approval notice approved and issued by the State Drug Administration, becoming a new listing license holder, or conducive to alleviating the dependence on a small number of core products in the future. Improve performance stability.
The new team has carried out a number of internal and external optimization of the company, including the introduction of resources, standardized management, implementation of incentives, further refinement and standardization of management arrangements, strengthening rule guidance, and superimposing incentive kinetic energy. it is expected to drive the company up and down in the right direction. Optimistic about the shareholders' industrial background and experience in resource integration, the effectiveness of the company's reform is expected to be released for a long time.
Investment advice: the company as a whole benefits from the revival of traditional Chinese medicine, core business stability, "Shuanghuanglian"
Series of products have a deep moat, and the products form a platform combination, benefiting from the trend of differentiation, differentiation and upgrading. The business of traditional Chinese medicine slices and drug R & D relies on professional subsidiaries for a long time to establish a benchmarking image in the industry and benefit from the long-term development of the medical industry. The company actively seeks change, and the background strength of the new controller is strong, which will be further blessed and promoted in resource matching, management mode and development ideas, so as to promote long-term, healthy and sustainable development. We are optimistic about the new vitality and new appearance brought about by the equity change, and the long-term development space of the company in the future. As the company's traditional advantage business is facing greater adverse effects this year, and the new management will continue to focus on convergence, optimization and pre-introduction of resources, the results of the reform are expected to continue to appear in the next few years, so adjust the profit forecast, it is estimated that the EPS for 2022-2024 will be 0.01,0.10 and 0.15 yuan, and the current stock price corresponds to 507.5x, 57.3x, 36.2x, maintaining the "over-holding" rating.
Risk hints: large fluctuations in raw material prices, lower-than-expected downstream demand, changes in epidemic situation and other vaccines, R & D and promotion process of specific drugs, changes in drug R & D demand, R & D progress less than expected, and the company's net profit has declined in the past two years.