The operation was good in the first quarter, and the net profit increased by more than 40% compared with the same period last year.
The company announced that its net profit in the first quarter of 2013 will increase by more than 40% compared with the same period last year. The increase in profit mainly comes from the increase in income and the decrease in costs.
Full-year net profit growth is expected to increase quarter by quarter
We believe that the trend of revenue growth and cost decline is expected to continue, and full-year net profit growth may increase quarter by quarter. The reasons include: 1) with the withdrawal of domestic and foreign competitors, the sales of corticosteroid APIs are expected to rise in both volume and price, leading to a further increase in revenue growth; 2) the production cycle of corticosteroid APIs is generally 3-6 months. The effect of the company's large-scale use of sterol routes and production path optimization of some products is expected to be concentrated in the next three quarters, leading to a further reduction in production costs.
Once the additional issuance project is completed, it is expected to accelerate the release of the company's performance.
The company's additional issuance project is expected to be completed in the near future. We believe that once the additional issuance project is completed, the growth of the company's performance will be accelerated: 1) the acquisition of the amino acid raw material drug business of Tianan Pharmaceutical Co., Ltd., it will bring about a net profit increase of about 10 million for the company over the past 13 years. 2) the implementation of corticosteroid API technical upgrading and production expansion project can reduce the production cost of some of the company's products by 10-30%, and the competitiveness and profitability of the company's corticosteroid API will be further enhanced. 3) the acquisition of Jinyao biological sewage treatment facility will provide guarantee for the company's long-term development.
Valuation: target price 5.5 yuan, maintain "buy" rating
Combined with the current operating situation of the company, we adjust the profit forecast for 13-15 years to 0.18Universe 0.24Compact 0.31 yuan (originally 0.18Compact 0.23Compact 0.29 yuan, not considering the impact of additional issuance projects). According to the UBS VCAM model (WACC9.5%), the target price is 5.50 yuan (originally 5.20 yuan), maintaining the "buy" rating.