occurrences
On October 25, the company released its report for the third quarter of 2018. It achieved total operating revenue of 285,616,300 yuan during the reporting period, an increase of 28.23% over the same period last year. Net profit attributable to shareholders of listed companies was 6,033,400 yuan, a decrease of 79.50% over the same period last year, and net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss decreased by 82.24% compared to the same period of the previous year.
reviews
Sales revenue for the company's same-caliber order increased rapidly year-on-year. Increased sales of tenofovir and the merger of Jiangsu ZTE Pharmaceutical led to additional volume. The company achieved revenue of 123 million yuan in Q3 2018, an increase of 70.02% over the previous year, mainly due to increased sales of the company's new variety of tenofovir and the merger of its subsidiary Jiangsu ZTE Pharmaceutical Co., Ltd. during the reporting period. Among them, Jiangsu ZTE contributed 36.1145 million yuan in operating revenue. After deducting the consolidated revenue of Jiangsu ZTE, the company achieved product sales revenue of 86.74 million yuan in the same quarter, an increase of 19.56% over the previous year. The revenue side accelerated significantly.
R&D investment continues to grow rapidly, and the global innovative drug GST-HG161 anti-liver cancer targeted drug has been approved for clinical trials. Influenced by the company simultaneously promoting R&D of several global innovative drugs and carrying out multiple major product consistency evaluations, the company invested 87 million yuan in R&D in the first three quarters of 2018, accounting for 30.46% of total operating revenue, a sharp increase of 32.21117 million yuan over the same period last year, of which 52.1561 million yuan was spent on costing 52.1561 million yuan. In addition, the company's new anti-liver cancer drug, GST-HG161, as a unique targeted c-Met inhibitor, has recently obtained clinical trial approval, and will organize a phase I clinical trial of this drug in early 2019.
Profit forecasting
The company's revenue for 2018-2020 is estimated to be 438, 605, and 810 million yuan respectively, and net profit attributable to shareholders of the parent company is 0.35, 0.50, and 62 million yuan, equivalent to EPS 0.25, 0.36, and 0.44 yuan/share. The corresponding PE is 116.44, 80.86, and 66.16 times, respectively. Considering that tenofovir is in the market expansion period, future revenue growth is expected to be high. At the same time, the company has high-quality R&D pipelines and continues to give “increase holdings” ratings.
Risk warning: Tenofovir market expansion is slowing down; new drug development risks; strategic benefits fall short of expectations.