Event

KuaiBao achieved an operating income of 1.527 billion yuan in 2016, an increase of 11.3% over the same period last year. The net profit attributed to the parent company was 405 million yuan, an increase of 7.8% over the same period last year, and fully diluted earnings per share was 0.69 yuan, in line with the previously announced performance forecast. Since the company began to bring Guilin Jinke canned Food Co., Ltd. and Guilin Jinke Health products Co., Ltd. into the scope of consolidated statements in July 2016 and adjust the comparison figures for the same period last year accordingly, as a result, there are some differences between my statistics and KuaiBao's data. I use 2015 unadjusted data for statistics.

Slow growth in the fourth quarter, dragging down performance

In a single quarter, the revenue in the fourth quarter was 522 million yuan, an increase of 7.6% over the same period last year, while that in the third quarter was 332 million yuan, an increase of 16.53% over the same period last year. It can be seen that the growth rate of performance in the fourth quarter was significantly slower than that in the third quarter, dragging down the annual performance. In 2016, the company continued to innovate its marketing management model, strengthen strategic cooperation with core businesses and key terminals, and at the same time further increase investment in R & D and enrich product structure. the growth of three expenses exceeded the growth of income, and the growth of net profit was lower than that of income.

The research and development of new products is progressing smoothly

Modafinil is a sleep drug developed by the company in 2011 in cooperation with the Institute of Radiology and radiation Medicine of the Academy of military Medical Sciences, with indications for patients with depression. Pharmacokinetic trials were carried out in 2015 and are still in the stage of preclinical research in 2016. other monoclonal antibody products are also well under way.

Investment strategy

We expect earnings per share from 2016 to 2018 to be 0.69,0.78 and 0.84 yuan respectively, corresponding to 27 times, 24 times and 22 times of PE, respectively.

Risk hint

Policy risk; new product research and development risk; medical safety incident, etc.