Key points of investment
The inflection point of performance is clear: the company's specialty products entered a period of rapid release in 2016, and traditional advantageous products maintained steady growth. After overcoming the trough period, the inflection point in the company's performance was already there, and the rapid growth trend was clear.
First in the country - esomeprazole: Laimei Pharmaceutical launched esomeprazole enteric capsules (remexol) in 2013 and achieved a 0.17% market share in 2014 (AstraZeneca 99.8%), and its market share rose to 1.1% in 2015. Currently, Lamex is in the midst of import substitution. We forecast a compound sales growth rate of 241.59% from 2016 to 2018 for this product (based on sales of 18 million yuan in 2015).
Exclusive variety - Nano carbon: Nano carbon suspension injection is the only lymphatic tracer independently developed by the company and approved by the CFDA. According to the Southern Pharmaceutical Economics Research Institute database, sales in 2015 were 120 million yuan. The company will apply to expand the indications for nano-carbon suspension injections. In the future, the product will hopefully expand the scope of treatment to lymphoma related to the head and neck, mammary glands, rectum, etc. We forecast a compound growth rate of 27.85% in nanocarbon sales in 2016-2018 (based on sales of 120 million yuan in 2015).
Exclusive Immune Enhancer - Ultelins: Ultelins is produced by China Jinxing Health Pharmaceutical Co., Ltd. and is an exclusive variety. Jinxing Pharmaceutical is 90% owned by Laimei Pharmaceutical, and the German pharmaceutical company Shanum Kiebek holds 10% of the shares. After introducing Utilins from Germany, Jinxing Pharmaceutical obtained exclusive domestic production and sales rights for this product, and entered the national health insurance category B catalogue in 2009. We forecast a compound sales growth rate of 19.81% from 2016 to 2018 for this product.
Traditional advantage products maintained steady growth: before being affected by the policy, the company's performance maintained steady growth, and the growth rate stabilized at more than 20%. We conservatively estimate that in 2016-2018, its traditional advantage products maintained a 10% growth rate.
Profit forecast and investment rating: We forecast Laimei Pharmaceutical (300006)'s revenue for 2016-2018 to be 1,226 million, 1,410 million and 1,627 million yuan respectively, and the net profit attributable to the parent company was 90 million, 112 million yuan and 129 million yuan; equivalent to the 2016-2018 EPS of 0.11 yuan, 0.14 yuan, and 0.16 yuan respectively; corresponding PE was 70.00, 65.00 and 67.00 times respectively. That's why we give it a “maintenance” rating.
Risk warning: Outreach mergers and acquisitions risks, product market expansion risks, policy risks.