Main points of the report
Event description
In 2014, the company achieved operating income of 343 million yuan, an increase of 108.27% over the same period last year; the net profit belonging to the owner of the parent company was 56.7 million yuan, up 108.76% from the same period last year, with basic earnings per share of 0.31 yuan; and deducting 47.39 million yuan from non-net profit, an increase of 110.14% over the same period last year. The company plans to increase 5 shares for every 10 shares.
Event comment
Jinbao Pharmaceutical consolidated table to improve the company's profitability: in 2014, the company's revenue increased by 108.27% compared with the same period last year, and its net profit increased by 108.76% over the same period last year. Jinbao Pharmaceutical Co., Ltd. consolidated in September 2014, contributing 168 million in income and 36.86 million yuan in net profit, accounting for 49% and 65%, respectively.
And the table brings a substantial improvement in the profitability of the company. The company's original chemical business income of 175 million yuan, year-on-year + 5.96%, the growth is relatively steady. The gross profit margin of the chemical business is 36.69%, and the pharmaceutical business is basically the same.
The traditional silica business is expected to usher in a recovery of demand: the company is a leader in the field of highly dispersed silica segments. It is expected that as silicone rubber replaces other rubber types in some non-tire areas, the company's silicone rubber silica is expected to usher in a recovery in demand, and considering the strong encouragement of green tires around the world, the demand for silica has great potential.
The quality of Jinbao Pharmaceutical is good, and the company has taken the first step in transforming pharmaceuticals: in August 2014, the company completed the acquisition of 97.713% of the shares in Jinbao Pharmaceutical. The underlying company is doing well, with revenue of 3.33 yuan and 370 million yuan in 2012 and 2013, and net profit of 8407 yuan and 96.76 million yuan, respectively. Jinbao Pharmaceutical currently has 66 kinds of drugs, including analgesic Huazhi capsule (Dongfang Dongbao brand) for treating gynecological diseases and Reduping granule for treating influenza. Zhitong Huazhuang capsule is a class B drug of health insurance, accounting for more than half of the market share, with an income of 160 million in 2013, while Reduping granule has newly entered Jilin Medical Insurance Class B with an income of 50 million in 2013. The leading varieties are all well-known brands and are expected to benefit from the revival of the brand OTC. Jinbao Pharmaceutical Co., Ltd. has strong sales ability, mainly agent marketing, and the sales network covers the whole country. Through the merger and acquisition of Jinbao Pharmaceutical, the company has successfully entered the pharmaceutical industry to enjoy the double improvement of performance and valuation. Jinbao Pharmaceutical has promised to deduct non-net profits of not less than 82 million yuan, 101 million yuan and 118 million yuan respectively from 2014 to 2016.
First coverage, given a "recommended" rating: the company's transformation to the health industry is determined, the traditional silica business is expected to usher in a recovery of demand, high margin of safety. Jinbao Pharmaceutical, which acquired for the first time, is of good quality and is expected to be located in the pharmaceutical asset integration platform and continue to achieve transformation through epitaxial mergers and acquisitions. It is estimated that the EPS from 2015 to 2017 will be 0.50,0.62 and 0.75 yuan respectively, corresponding to 42x, 34x and 28x PE respectively, and will be given a "recommended" rating for the first time.