Key points of investment
Next Tuesday (March 21), a GEM listed company “Keyuan Pharmaceutical” will ask for a quote.
Keyuan Pharmaceutical (301281): The company is mainly engaged in R&D, production and sales of chemical raw materials and their formulation products. The products cover key disease fields such as hypoglycemic, narcotic, cardiovascular and psychiatric diseases. The company achieved operating income of 367 million yuan/421 million yuan/443 million yuan respectively in 2020 and 2022, YOY was 18.02%/14.67%/5.22% in that order, and the three-year revenue compound growth rate was 12.50%; achieved net profit of 69 million yuan/78 million yuan/191 million yuan, YOY was 127.73%/13.87%/16.77% in that order, and the three-year compound annual growth rate of net profit of 44.67% for the three years. The company initially predicted net profit for the first quarter of 2023 to be between 270-32 million yuan, a year-on-year change of -1.63% -16.58%.
Investment highlights: 1. The company is the leading domestic producer of glizide and ropivacaine hydrochloride APIs. It also has a strong competitive advantage in the fields of metformin hydrochloride and isosorbate mononitrate APIs. Chemical raw materials are the company's core product field, and the company's existing raw materials all have strong market competitiveness. Currently, the company is a leading manufacturer in the fields of glitazide and ropivacaine hydrochloride. According to IMS database data, in 2020, the company's glitzide sales accounted for 36.00% of global consumption of similar APIs, and ropivacaine hydrochloride sales accounted for 25.41% of global sales. At the same time, the company is also one of the important suppliers of metformin hydrochloride and isosorbate mononitrate. In the national collection, a significant proportion of the winning companies were company customers or were already in the process of adding new companies as suppliers. Specifically, customers of glitzide, metformin hydrochloride, ropivacaine hydrochloride, and isosorbate mononitrate related companies had 44.72%, 20.68%, 72.27%, and 39.55% of the winning bids, respectively. The company's performance in the corresponding fields may be highly sustainable. 2. The company has the advantage of integrated production of isosorbate mononitrate “APIs - formulations”, and product development was good during the reporting period. The company achieved the acquisition of Linuo preparations under the same control in 2019, forming an integrated production capacity of “API drug+formulation”, which has good cost and quality advantages.
The company's advantage is well reflected in isosorbate mononitrate related products. Currently, the corresponding preparation isosorbate mononitrate tablets have passed the consistency evaluation and were included in national collection in July 2022. According to the collection winning bid documents, the winning bid price of the company's isosorbate mononitrate tablets was 0.41 yuan/tablet, which is significantly higher than the company's average sales price of 0.15 yuan/tablet in 2021. At the same time, the agreed annual purchase amount is 55,98862 million yuan (not taking into account delivery and other related costs), which is expected to bring about a certain increase in the company's performance. 3. The company has already entered the field of cosmetic intermediates, and the construction of corresponding production capacity is expected to provide good support for performance growth. The company's intermediate products include OR10127 and OR10154, both used in L'Oréal sunscreen products, of which OR10127 is the upstream raw material for OR10154. With the liberalization of overseas epidemic control, demand for overseas travel and tourism grew rapidly, and the company's OR10154 intermediate sales showed good growth during the reporting period. Based on this, the company plans to use IPO capital to increase OR10154 production capacity by 300 tons. After completion, the company's production capacity of this product will increase significantly compared to the production capacity of 64.8 tons in 2021, which may contribute to the company's performance growth.
Comparison of listed companies in the same industry: The company focuses on the production of chemical raw materials, preparations and intermediates. The main products are chemical raw materials; the main products are chemical raw materials; Jiuzhou Pharmaceutical, Proluo Pharmaceutical, Aoxiang Pharmaceutical, Minova, Tonghe Pharmaceutical, and Hendy Pharmaceutical are comparable listed companies. Looking at the comparable companies mentioned above, the average revenue scale of the industry from the fourth quarter of 2021 to the third quarter of 2022 was 3.162 billion yuan, the comparable PE-TTM (excluding the highest value/arithmetic average) was 37.84X, and the gross sales margin was 34.84%. In comparison, the company's revenue scale was lower than the industry average, but the gross sales margin was higher than the industry average.
Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.