The profit in the fourth quarter is 46 million yuan, which is basically in line with expectations: the annual performance in 2014 is expected to grow by 61.2%, and the annual performance is about 180 million yuan, equivalent to 0.40 yuan in EPS. The net profit in the first three quarters is 134 million yuan, and the market has fully digested the expectation of large swings in the company's performance. The net profit in the fourth quarter is 46 million yuan, which is basically in line with expectations.
The suspension of production has a great disturbance to the annual performance: OTC carried out GMP certification in the first half of the year and stopped production for nearly three months, resulting in OTC performance falling short of expectations in the first half of the year (only 18.0952 million yuan in the first half); in the second half of the year, solid preparations of prescription drugs were suspended for three months and GMP certification was carried out, resulting in lower-than-expected performance of prescription drugs. According to our split model, the growth rate of Jinqiao Pharmaceutical Industry after deduction is close to 30%, Magic Pharmaceutical has a single-digit increase (more than 80 million net profit), and Baiqiang Pharmaceutical has increased by about 10% (more than 84 million net profit). The impact of GMP certification throughout the year has a certain disturbance to the company's annual performance, but the background of the high growth of the main variety sodium cantharidate series products, coupled with the swing of OTC product channel inventory. As a result, the company's performance is very flexible, so the company's annual performance will be considered according to the company's long-term development strategy.
Terminal data show that the growth rate of the main varieties is improving: according to the PDB terminal data, sodium cantharidinate VB6 increased by 25.7% in the first three quarters, sodium cantharidate injection increased by 52.83%, and sodium cantharidate tablets are expected to exceed 20 million. This growth rate is still impressive when the bidding is stagnant in various places (see the attached figure in the text for PDB data).
Maintain the buy-An investment rating with a 12-month target price of 21.6 yuan. Taking into account the uncertainty of policies such as tendering and bidding, regardless of the incremental market brought about by future tendering and entering the national health insurance catalogue, the EPS for 2015-16 is 0.54,0.70 yuan, which is 24% and 27% lower than the original forecast (including policy expectations). The profit forecast will be adjusted after the policy is clear.
Risk hints: internal integration may take a long time; operational risks of family businesses
