Event: the company announced a major asset purchase plan (revised draft) to acquire a 100% stake in Qili Pharmaceutical at a consideration of 2.142 billion.
After the acquisition of Qili Pharmaceutical, it not only greatly increases the company's net profit, but also has great synergy with the company's original business. The company's original chemical products include cephalosporins and intermediates, cefaclor granules and other chemical preparations, and characteristic drugs represented by Changweikang and paclitaxel. Unlike most preparation manufacturers in the market, which rely on outsourcing for raw materials, the company produces its own products from radionuclides to raw materials to preparations. Changweikang, cefoxitin sodium, aztreonam, cefazoxime sodium and other single products have a high market share. Haikou Qili is one of the top 10 anti-infective drug manufacturers in China, with an income of 1.2 billion yuan and a net profit of 102 million yuan in 2017. if the acquisition is completed, it will be 66% and 118% higher than that of the listed company in 2017, respectively. The company's net profit has increased significantly. More importantly, the company's advantages in raw materials and sales channels can help Haikou Qili Pharmaceutical to further open the market, and Qili's revenue and net profit growth is expected to further accelerate in the future.
The multi-line layout of the company's business is interesting. Hainan marine medicine business layout biomedicine, medical devices, Internet medical care and medical services several major sectors, a number of business development is very unique and interesting. In the field of biomedicine, the company has a rich pipeline of 1.1 new drugs, including 1.1 new drugs for rheumatoid arthritis, lymphoma, lupus erythematosus, SM09, SM06 and other tumor drugs. According to the announcement, in April 2018, the company and Youkadi jointly established Hainan Haiyou (with an 80% stake), becoming one of the leading car-t R & D and manufacturing enterprises in China. Youkadi specializes in the development of CAR-T technology and products. A total of 8 domestic companies have accepted clinical applications for CAR-T products by CDE, including 10 CAR-T cell products, while Youkadi accounts for four. In terms of medical devices, the company is a relatively scarce listed company with cochlear implants. Shanghai Lixinte, which owns 91.17% of its shares, has set up nearly 70 cochlear surgery centers with an income of 11.27 million in 2017. In addition, the second-generation cochlear implant developed by the company is in the clinical trial summary stage and will become one of the domestic cochlear implant enterprises listed quickly. In terms of medical services, the company's Egang Hospital, Rehabilitation Hospital and Hemodialysis Hospital have seen a significant increase in revenue and net profit. With data and services as the core, Internet health care has made an in-depth layout in Sichuan, Chongqing, Guizhou, Hunan and other provinces in the fields of national health information platform, grass-roots health information platform, hospital informatization, mobile health care, health management, telemedicine, and doctor training, and formed an Internet medical ecosystem covering more than 200 million people.
Investment suggestion: regardless of Qili Pharmaceutical consolidation, we expect the company's 2018-2020 net profit to be 3.3,4.3 and 580 million yuan respectively, with a valuation of 52,40,30 times PE respectively, and an investment rating of overweight-A, with a six-month target price of 14.40yuan, corresponding to a dynamic P / E ratio of 45 times in 2019.
Risk tips: competition accelerates the decline of gross profit margin; the progress of research and development is lower than expected; the acquisition of Qili Pharmaceutical is uncertain.
