Core viewpoints
The performance forecast is in line with expectations, with medium-and low-speed growth in the adjustment. The company issued an annual performance forecast for 2017. during the reporting period, the company realized a net profit of 268 million yuan to 297 million yuan, an increase of-5% Rue 5% over the same period last year, in line with the market and our expectations. The company's main product Tanreqing declined in the second half of 2015 and gradually stabilized in 16 years. At present, sales in 17 years remain stable. Affected by the changes in the overall environment of the pharmaceutical industry, the sales of traditional Chinese medicine products are generally poor, but the company actively responded, we expect Tanreqing series products to maintain a stable sales state.
Tanreqing will become a series of products to promote the growth of the company's performance. The company builds a series of products around Tanreqing injection, including capsules, oral liquid, 5m dosage form for children and atomization research. Among them, Tanreqing capsule has been on the market for 15 years, the oral liquid is in the Ⅲ phase clinical study, and the children's dosage form is improving the supplementary approval opinions. We believe that the launch of many varieties of Tanreqing will effectively fill the current blank market, and then promote the company's performance growth.
Actively build a new product echelon, paclitaxel micelle is expected to report production this year. Through purchase and cooperative development, the company has successively obtained new drugs under development, such as Youxinding capsule, Dinggui Oil soft capsule, Shufeng Zhitong capsule and Huadan Anshen Mix. at present, Youxinding capsule is in the stage of IIb clinical research, the other three varieties are in the stage of Ⅲ clinical research, and the echelon of new products is gradually formed. In addition, the company also cooperated with Shanghai Yizhong Biology to develop "Paclitaxel Micelle for injection"; to increase investment in Shanghai Goebard Biology, and to obtain the priority purchase right of "laminin for injection". At present, Duranamine is in the phase 3 clinical supplementary trial, and paclitaxel micelle is in the final stage of phase 3 clinical trial, which is expected to be declared for production this year.
Financial forecasts and investment suggestions
We expect the company to achieve a net profit of 2.93 million yuan in 2017-2019, corresponding to an EPS of 0.27, 0.29, 0.30 yuan, and a 17-year price-to-earnings ratio of 33 times the average valuation of the comparable company, corresponding to a target price of 8.91 yuan, maintaining the company's "buy" rating.
Risk hint
1) if the progress of new drug development and approval is not as expected, it will have a negative impact on the long-term development of the company.
2) if Tanreqing series products decline, it will have a negative impact on the overall performance.