Main viewpoints
1. The growth rate of infusion line is fast, and ReduNing is slightly higher than expected.
For the whole of last year, the company's revenue side and net profit side grew by 6.38% and 3.15% respectively, and this year's Q1 growth rate was 10.15% and 5.44% respectively. We believe that strengthening sales has increased the sales scale, and the gross profit margin of each product line has increased by 1.98%. Led to a small increase in net profit.
During the reporting period, the company's infusion line revenue increased by 15.98% compared with the same period last year, and its products include Reduning and potential varieties of ginkgo diterpene lactone meglumine injection. according to the revenue scale of these two varieties last year, we expect Reduning to grow by about 10%. Ginkgo diterpene growth rate is more than 100%. Among them, Reduning slightly exceeded expectations when the growth rate was less than 2% for the whole of last year. We think that on the one hand, it is because spring is the outbreak season of influenza, which drives sales, and at the same time, it is related to the promotion of the company, such as increasing its adult departments; the restrictions on its use by the new version of health insurance can only be reflected in the fourth quarter, and the company is expected to make up for it by increasing coverage.
The growth of ginkgo diterpene lactones is in line with expectations and is now on the negotiating list and the results of the negotiations are expected to be announced by the end of July. We believe that as a strategic variety of the company, its health insurance negotiation is of great significance. High quality standards make it possible to maintain a high gross profit margin even if the price falls sharply. If the company can negotiate access to health insurance, it will significantly increase the company's profits.
two。 The capsule product line has declined, and the effectiveness of marketing reform is expected to gradually reflect the effectiveness of other product lines. The capsule product line, as the company's second largest product line, fell by 11.78%, while oral liquid and pills increased by 27.8% and 34.33% respectively. The capsule product line includes Guizhi Fuling capsule, Sanjie analgesic capsule, Yaobitong capsule and other large varieties, and its sales for the whole of last year are not satisfactory, which is also the focus of the company's marketing reform. we believe that the effectiveness of the new marketing system implemented by the company from this year is expected to be gradually reflected.
In terms of expenses, the rates of sales expenses and management expenses were 43.75% and 14.40% respectively, an increase of 17.26% and 11.76% over the same period last year. It can be seen that the company has significantly increased its marketing efforts, with financial expenses of 10.79 million, a decrease of 16% over the same period last year.
3. Profit forecast and investment advice
We believe that the company will make efforts in variety marketing this year, and the exclusive varieties of gynaecology, cardio-cerebrovascular lines are expected to benefit significantly, while Reduning maintains a steady growth with the increase in department coverage, and the negotiation of ginkgo diterpene injection should be paid more attention to. We estimate that the EPS of the company from 2017 to 2019 will be 0.70,0.82 and 0.95 yuan respectively, corresponding to 24,20 and 18 times of PCME, respectively. We suggest that we should focus on maintaining the recommended rating.
4. Risk hint
The effect of marketing reform is not as expected, and the result of health insurance negotiation is not as expected.