Core ideas:
Event: the company issued a forecast of third-quarter results. The company issued a forecast of third-quarter results. The net profit of parent shareholders in the first three quarters of 2016 was 7254-94.31 million yuan, down 35% and 50% compared with the same period last year. The net profit of returning shareholders in the third quarter was 1821-28.61 million yuan, down 45% and 65% from the same period last year. The company's income and net profit in the first half of the year were 814 million yuan and 53.2 million yuan respectively, an increase of 8.26% and a decrease of 42.83% over the same period last year.
Traditional drugs are a drag on performance, and full-year results are still under pressure. Traditional medicine antiviral oral liquid and Banlangen account for a high proportion of income. due to the problems of overstock and stagnant market share in the agent model in the past, the company changed to a self-operated direct control terminal, which is affected by the factor of destocking. It is expected to decline by 40% and 50%, which has become the main factor in the decline in profits.
Prepared slices and show that Tianji expects income growth, plate growth is good. In the first half of the year, part of the company also showed the Hubei Tianji prepared slices business, the income increased, the growth rate of the prepared slices plate is expected to maintain about 30%, and the company's prepared slices business is growing well. After showing Tianji in Hubei Province, the company has an annual income of about 500 million yuan, making it a leading Chinese medicine enterprise in China, realizing the benign expansion of the boom industry.
The second phase of the TCRT project has been launched, and the other projects in progress have been completed in the first phase of TCR in 2015. In the second phase, 36 cases are planned to study the symptoms of NSCLC and lung cancer. For other projects under study, small nucleic acid Cottlani has entered the rapid review channel of the drug review center, and the KX02 project has completed the preclinical research work, has been accepted by the national CFDA drug review center, and began to conduct technical review in CDE.
It is expected that the performance of the company from 16 to 18 will be 0.21 yuan / share, 0.35 yuan / share and 0.43 yuan / share respectively, and the TCR technology is comparable to that of the international leader. We expect the company to maintain a "buy" rating at the current share price corresponding to PE67/40/33 times the company's annual EPS of 0.21 to 0.35 in 16-17-18 (EPS is 0.27 in 2015).
The risk suggests that drug research and development is lower than expected; the destocking of traditional medicine is lower than expected; and the business development of prepared pieces of traditional Chinese medicine is lower than expected.