Main points of investment
Event: on October 26, 2016, the company released the third quarter report of 2016, showing that its operating income in the first three quarters was 294 million yuan, up 44.13 percent over the same period last year; its net profit was 64.01 million yuan, an increase of 62.74 percent over the same period last year; and earnings per share was 0.38 yuan, an increase of 22.58 percent over the same period last year.
Steady increase in performance and enhanced profitability: first of all, we benefited from the sales of the new product Orezi, which sold about 90 tons and contributed a profit of about 6 million yuan. Secondly, the increase in operating income during the reporting period was due to the inclusion of three subsidiaries (Hull Medical, Sanji Biology and Crystal Energy Biology) in the consolidated statement. In the first three quarters, the company's gross profit margin was 45.38%, an increase of 4.96pp, a net profit rate of 21.75%, and an increase of 2.49pp, indicating that the company's profitability was further strengthened.
Domestic and foreign mergers and acquisitions to speed up the development of new business: on July 8, 2016, the company's board of directors and shareholders' meeting examined and passed the "bill on foreign investment of subsidiaries". Sanji biology, a subsidiary of the company, invested 14.76 million yuan to acquire a 73.8% stake in Suzhou Dongsheng. Suzhou Dongsheng is engaged in the production and service of PCR instruments and occupies a leading position among domestic suppliers. The combination of the two is conducive to the business integration of Sanji, provide new products and reduce the cost of original services, form new core competitive advantages, give full play to synergy, and further enhance the ability of sustainable development of Sanji. On July 15, 2016, the company's board of directors examined and passed the "Bill on overseas Investment", in which the company subscribed for 31.92% of the shares of NeoDynamics AB, a Swedish company, with self-raised funds of RMB 17.7533 million, making it its largest shareholder. The company will actively make use of NeoDynamics AB's advanced NeoNavia biopsy system, actively promote the development of this business, and further consolidate the development foundation of the company's "health care service" platform, so as to achieve the company's strategic goal of long-term sustainable development.
Participate in the national major project of precision medicine: the company's wholly-owned subsidiary Sanji Biology and Peking University and other five units jointly participated in the national key research and development program precision medical research project "pharmacogenomics and Chinese precision drug use comprehensive evaluation system". In order to better complete this special task, the company plans to increase capital to set up Beijing New Open Source Precision Medical Technology Co., Ltd. to cooperate with the implementation of the project. The joint collaboration of the two companies will enable the new open source to open up the entire industry chain of precision medical research from laboratories to hospitals to pharmaceutical companies. At the same time, this foreign investment also directly promotes the development of the company's precision medical platform, further enhances Sanji biological brand awareness and enhances the company's overall profitability, and has a positive impact on the company's future revenue and profit growth. in line with the company's long-term development strategy.
Profit forecast and investment rating: we forecast that the operating income of New Open Source (300109) from 2016 to 2018 is 449 million yuan, 575 million yuan and 725 million yuan respectively, and the net profit attributable to the parent company is 111 million yuan, 160 million yuan and 208 million yuan respectively; equivalent to 2016-2018 EPS is 0.65 yuan, 0.94 yuan, 1.22 yuan respectively; the corresponding PE is 83, 57 and 44 times, respectively. We give "overweight" rating for the first time.
Risk tips: the risk of environmental protection, the risk of R & D of new products, the risk aggravated by market competition, the risk of overseas investment.
