Operating data:
Hongyuan template companies achieved operating income of 262 million yuan from January to June 2014, an increase of 327.47% over the same period last year; net profit belonging to shareholders of listed companies was 31.7218 million yuan, up 330.09% from the same period last year; corresponding to earnings per share of 0.0625 yuan. The net profit attributable to shareholders of listed companies is expected to increase by 391.96 to 413.82 per cent in the first and third quarters of 2014 compared with the same period last year.
The tail-warping effect of the fully-funded sand pharmaceutical industry has contributed to the substantial growth of business volume. At the end of November 2013, the company completed the acquisition of 64.47% of the shares in Sands, and has since owned 100% of Sands, and has included Sands in the company's consolidated financial statements. As a result, the tail-warping factor led to a surge in performance indicators in the first half of 2014.
The gross profit margin rises, the expense rate decreases during the period, and the profitability continues to strengthen. The company achieved a gross profit margin of 58.03% in the current period, an increase of 8.28% over the same period last year. It is mainly the synergy of the fully funded sand pharmaceutical industry that led to a 24.83% increase in the gross profit margin of the company's home-made drugs. In addition, during the current period, the company's expense rate decreased by 3.86% compared with the same period last year, the management / financial expense rate decreased by 8.32% and 0.66% respectively, and only the sales expense rate increased by 5.11%. As a result, net profit increased by 330.09% year-on-year, slightly higher than the growth rate of operating income.
The competitive advantage of traditional medicine market is obvious, plum tree planting and antineoplastic drugs open up new profit growth points. At present, the company has more than 70 drug varieties in 5 dosage forms, and the leading products Shuangyao Houfeng Powder and Chongganling tablets are national traditional Chinese medicine protected varieties, which have brand influence and occupy a certain market share. Jinsha Pharmaceutical Co., Ltd., a wholly-owned subsidiary of Jinsha Pharmaceutical Co., Ltd., is the exclusive product of Jiegu Qili tablet and Shufeng Huoluo tablet, which are all applied for patent protection or traditional Chinese medicine protection. The company focuses on these four products and actively promotes hospital bidding and terminal sales. 2) the large-scale production of natural borneol is the bright spot of the company's valuation. in this period, the company continues to work with the scientific research forces of colleges and universities to develop plum tree resources. 3) the company signed a technical cooperation contract with Jinan University to jointly participate in the research and development of "antineoplastic nano-drugs". The early clinical results show that the company has the advantages of good effect, low toxicity and broad application prospects. it will become a new profit growth point of the company in the future.
Risk hint. Plum tree planting and natural borneol extraction and sales are lower than expected.
Profit forecast and valuation. We estimate that the EPS of the company in 2014-2016 will be 0.29yuan / 0.37yuan / 0.54yuan. At the same time, we are firmly optimistic about the prospects of the company's natural borneol planting / deep processing business and its involvement in new anti-cancer areas, and maintain its "buy" rating.
