The company has completed its first round of restructuring, and the employee stock ownership plan demonstrates the company's confidence in the future.
In September 2016, the company completed the asset exchange and bought the coal assets out of the listed company at a consideration of 255 million yuan, at the same time at a price of 1.945 billion yuan, and invested 100% equity in Huawei Pharmaceutical by issuing shares, thus formally completing the transformation from coal as the main industry to medicine as the main industry. In January 2017, the company completed a new round of fixed growth, improved its financial structure, further enhanced the company's debt repayment and financing ability, and prepared for further asset integration in the future. The employee stock ownership plan was completed at the same time. The company's core executives and senior managers are included in the scope of shareholders, which shows the company's confidence in future development.
Put in CRO high-quality assets, business layout is in line with the development direction of the industry.
Huawei Pharmaceutical is a leading preclinical CRO company in China, which has rich experience and profound understanding in drug research and development, especially in the establishment of the first imitation drug project, process development, quality control and drug registration. At this stage, the company has laid out clinical CRO and CMO business downstream, and established a joint venture with Kangyuan Pharmaceutical Co., Ltd. to focus on the research and development of chemical generics; the company has profound accumulation in the pharmaceutical evaluation stage, and Lian, as a subsidiary of Warwick Pharmaceutical's clinical CRO business, also has clinical BE monitoring capability, which is expected to take the lead in the 10 billion-level market of CRO conformance evaluation.
Aim at creating a platform for pharmaceutical innovation and comprehensively laying out the sunrise industry to welcome new students.
On January 2, 2016, the State-owned Company of the sixth Division, Liyi Investment and Ruidong Fortune signed the Strategic Cooperation Agreement, which put forward a reasonable plan for the establishment of the company's new governance structure and the establishment of the management team. to support Baihua Village in the continuous acquisition of high-quality business assets in pharmaceutical R & D outsourcing services and biopharmaceuticals. We believe that after the completion of this asset restructuring, the company will give priority to integrating high-quality assets in the field of CRO, further improve the CRO industrial chain, and is expected to extend downstream to new drugs and other product research and development areas in the future, so as to enhance the company's value acquisition ability in the R & D industry chain.
Profit forecast and investment advice
After the completion of the asset exchange, the company has jumped into the CRO industry chain and has placed assets Warwick Pharmaceuticals is a leader in the CRO industry with strong profitability. The company is expected to further invest in high-quality pharmaceutical assets in the future, and the company is expected to become a platform company for pharmaceutical innovation in the future. Regardless of the future asset restructuring, we estimate that the net profit of Warwick Pharmaceutical in 16-18 will be 1.08max 1.3 / 156 million, an increase of 20% in 17 / 18 compared with the same period last year. Considering the additional issuance and dilution in January 2017, we expect to achieve EPS0.31/0/32/0/39. At the same time, taking into account the company's industry and future asset restructuring expectations, we give the company a target price of 20.8 yuan. Corresponding to the 2017-18 valuation of 650.53 times, covering for the first time, giving an overweight rating.
Risk tips: Huawei Pharmaceutical performance is not up to expectations; the company's asset integration progress is not up to expectations.