Event: the company issued a 2016 performance forecast on the evening of December 20, predicting a net profit of 2.2-239 million yuan in 2016, an increase of 239% to 268% over the same period last year, corresponding to an EPS of 0.55-0.60. at the same time, it plans to increase the dividend of 20 shares by 2 yuan for every 10 shares of capital provident fund.
Comments:
The performance inflection point has passed, and the original main business has hit bottom and rebounded. After 15 years of low performance, the company's original main industry has passed the performance inflection point and doubled its profits. Thanks to the company's GMP transformation and new product declaration, the product structure and operating efficiency have been optimized, and API and preparation business has rebounded sharply compared with the same period last year. It is expected that the main varieties such as sulfampicillin sodium, nicergoline and hydrocortisone will have a certain degree of restorative growth. Cefuroxime sodium is newly approved and the volume is about to be released. Oxiracetam API benefited from the domestic competitor GMP failed flight inspection, the leader CSPC Pharmaceutical Ouyi Pharmaceutical was forced to relocate and other external factors, this year to achieve volume and price rise, short-term contribution to performance increment.
The effect of extension is remarkable, and the performance of the target of M & An is beautiful. Ningbo Tianheng began to consolidate the table in May last year, and its 16-year profit contribution is expected to be about 60 million yuan (50 million yuan promised). Only Chu Pharmaceutical Co., Ltd. is expected to contribute about 70 million yuan in June this year. Ningbo Tianheng's Toremifen Citrate tablets and granisetron Hydrochloride tablets have great variety potential, consistency evaluation has been carried out, only Chu Pharmaceutical's lipoic acid for injection is in a period of rapid growth, and the core team is fully motivated. The performance of M & A targets in the future is expected to continue to exceed expectations.
High delivery transfer plan is good for the stock price. The pressure of short-term reduction is not great. High delivery is good for the stock price in the short term, while the disclosed reduction plan has little pressure on the stock price in the short term. Among them, Wang Tianxiang, the controlling shareholder, promised not to reduce his holdings within six months, while other senior executives planned to reduce their holdings by no more than 6.14 million shares within six months, accounting for only 1.5% of the total share capital. Wang Lu planned to reduce his holdings by no more than 19.7 million shares during the period from April 10 to June 20, 17.
Investment suggestion: we predict that the company's earnings per share from 2016 to 2018 will be 0.58,0.84 and 0.96 yuan respectively, and the PE corresponding to the closing price of 27.28 yuan on December 20 will be 47, 33 and 29 times respectively. The company is given a 40-fold valuation in 2017 and a six-month target price of 33.6 yuan, covering it for the first time and giving the company a buy-A rating.
Risk tips: performance commitments are not up to standard; limited resistance and other drug policy risks.
