Key elements of the report:
Before Chitianhua, it was mainly engaged in the production and sales of urea and methanol. In 2016, the company acquired Sheng Jitang, a pharmaceutical company mainly engaged in diabetes business. So far, the company has formed a dual main business platform of "chemical industry plus medical health". At present, the number of people with diabetes in China is more than 100 million, and the market space is more than 50 billion. with the continuous increase in the number of domestic patients and the continuous improvement of diagnosis and treatment rate. The domestic diabetes market still has great potential in the future. At present, Shengjitang has formed a diabetes product group with metformin enteric-coated tablets and glimepiride tablets as the core, and the related consistency evaluation is progressing smoothly. At the same time, the company is also carrying out the R & D layout of blockbuster diabetes drugs such as acarbose, and is also actively building diabetes hospitals and tumor hospital projects. in the future, the company will develop into a health industry management platform with diabetes chronic disease management as the core.
Main points of investment:
The domestic urea market is expected to have a tight balance.
The period from 2011 to 2015 is the peak of large-scale production of international urea capacity, and the global urea capacity has increased from 182 million tons to 223 million tons. At present, the period of large-scale production of global urea capacity has passed, and the domestic supply-side reform to eliminate production capacity is still continuing. at present, the overall domestic urea inventory is at a historical low, and a considerable part of parking capacity will not be able to recover for a period of time in the future. recently, urea prices have been relatively high in the past two years, and with stable demand downstream, the domestic urea market is expected to usher in a tight supply balance.
Deeply ploughing the field of diabetes treatment and sharing the vast market space for diabetes China has the largest number of people with diabetes in the world, with 114 million in 2017. At present, the domestic diabetes drug market space is nearly 50 billion yuan. In the future, with the continuous improvement of diagnosis and treatment rate and the popularity of new treatment drugs, the domestic diabetes market still has great potential to grow. Shengjitang ploughs the R & D and production of diabetes drugs, and currently forms a diabetes product group with metformin enteric-coated tablets and glimepiride tablets as the core, and the related consistency evaluation is progressing smoothly.
At the same time, the company is also carrying out the layout of acarbose and other product research and development and diabetes hospital construction projects, in the future the company will develop into a health management platform with diabetes chronic disease management as the core.
Profit forecast and investment advice: the company is expected to achieve a return net profit of 121 million and 166 million in 2018 and 2019, respectively, with a corresponding EPS of 0.07 yuan and 0.096 yuan respectively; corresponding to the current stock price PE is 81 times and 59 times respectively; continue to recommend and maintain the "overweight" rating.
Risk factors: the risk of decline in urea prices, the risk of increased competition in the diabetes drug market, and the risk that the implementation of consistent evaluation policies is lower than expected.
