Main points of investment

Next Tuesday (November 1), there will be a gem listed company "Xintiandi" inquiry.

Xintiandi (301277): the company is mainly engaged in the research and development, production and sales of chiral pharmaceutical intermediates, the main products are L-p-hydroxyphenylglycine series products and p-toluene sulfonic acid. From 2019 to 2021, the company achieved operating income of 407 million yuan / 433 million yuan / 514 million yuan, YOY of 37.76%, 6.54%, 18.64%, and a compound annual growth rate of 20.31%. The net profit of homing was 109 million yuan / 118 million yuan / 115 million yuan, and the YOY was 281.75%, 8.52%, 2.94%, and 59.02%, respectively. During the latest reporting period, 2022Q1-3 achieved an operating income of 448 million yuan, an increase of 37.06% over the same period last year, and a net profit of 89 million yuan, an increase of 16.13% over the same period last year. The company expects to achieve a net profit of 12800-132 million yuan in 2022, an increase of 11.33% and 14.80% over the same period last year.

Investment highlights: 1, the company's core product L-p-hydroxyphenylglycine production capacity ranks second in the world, is expected to benefit from the rapid growth of amoxicillin preparation exports; and the company's D acid products have good advantages in terms of cost and environmental protection. At present, the company is the world's second largest manufacturer of L-p-hydroxyphenylglycine and D-acid. According to the China Pharmaceutical Industry Information Center, the company's L-p-hydroxyphenylglycine production capacity has a global market share of 29.47% in 2021, second only to Prozac. The overall export scale of China's amoxicillin preparation has shown a rapid upward trend since 2016, and the compound annual growth rate of China's amoxicillin preparation export scale is expected to reach 14.03% from 2020 to 2023. Inner Mongolia Federation and Zhuhai Federation, which are among the excellent list of API exports, are both important customers of the company, and the company is expected to benefit from the increase in API demand brought about by amoxicillin export growth. In addition, compared with Pulo Pharmaceutical, the company's existing D acid series product production line and environmental protection treatment equipment investment time is shorter, so the D acid products have a certain cost advantage and environmental protection advantage compared with Pulo Pharmaceutical. 2. The company is actively expanding into the field of downstream APIs and preparations. At present, 2 APIs have been registered and a total of 20 APIs and preparations are being studied. After the completion of the fund-raising project, it is expected to form an annual production capacity of 120 tons of APIs. The company's existing products are chiral pharmaceutical intermediates, the direct downstream is API, and the downstream of API is preparation. The company actively expands the field of API and preparation by virtue of its established advantages in the field of pharmaceutical intermediates. At present, the company's lidocaine hydrochloride raw material drugs and naphthazoline hydrochloride raw material drugs have been reviewed by the Drug Evaluation Center of the State Drug Administration and registered for the record; the project under research includes 18 API drugs and 2 preparation varieties, of which 3 varieties have been submitted to the Drug Review Center of the State Drug Administration for registration and 1 variety has passed the on-site verification of drug registration.

The fund-raising and investment project "API Construction Project with an annual output of 120 tons" is planned to be put into production line to form the production capacity of six kinds of API products, such as moxifloxacin hydrochloride, voglitine and omeprazole. 3. The company seizes the opportunity of the peak of the expiration of the original research and development patent and distributes the CDMO business through the holding subsidiary.

According to the statistics of Evaluate Pharma, the patent of the original research drug will expire in 2022. It is expected that the patent of the drug with annual sales of 40 billion US dollars will expire in that year, and the annual sales of the drug whose patent expires from 2020 to 2024 is expected to be as high as 159 billion US dollars. The variety and quantity of generic drugs will increase rapidly, bringing opportunities for the development of the CMO/CDMO market of upstream intermediates and APIs. In 2021, the company seized the opportunity to set up two subsidiaries, Xintiandi Zhaoyan (Beijing) and Xintiandi Zhaoyan (Henan) together with Zhaoyan New Pharmaceutical subsidiary, to build an one-stop platform for CDMO and lay out the downstream chemical API CDMO business.

Comparison of listed companies in the same industry: the company's main products are L-p-hydroxyphenylglycine series products and p-toluenesulfonic acid. According to the similarity of business, we select Plus Pharmaceutical, Tonghe Pharmaceutical, Fuxiang Pharmaceutical and Tianyu as comparable listed companies. According to the above comparable companies, the average income of the industry in 2021 is 3.377 billion yuan, the PS-TTM (excluding abnormal values / arithmetic average) is 3.17X, and the sales gross profit margin is 30.97%. Comparatively speaking, the revenue scale of the company is lower than the industry average, but the gross profit margin is higher than the industry average.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data selection may have interpretation deviation, specific listed company risk is displayed in the text content, and so on.