Events:
The 1H2015 income was 779 million yuan, down 7.89% from the same period last year, and the net profit was 19 million yuan, down 0.51% from the same period last year. The net profit after deducting non-return was 14 million yuan, down 4.22% from the same period last year, and the earnings per share was 0.06 yuan. The gross profit margin in the first half of the year was 26.51%, up 2.1% over the same period last year, and the net profit rate was 2.38%, up 0.14% over the same period. The company's performance was lower than expected.
Main points:
The drug bidding policy is stricter and the growth rate of the pharmaceutical industry is declining.
The revenue of the pharmaceutical industry was 294 million yuan, down 27.29% from the same period last year, and the gross profit margin was 38.53%, up 7.42% over the same period. The slowdown in drug revenue was mainly affected by drug bidding and price reduction. Revenue from chemical drugs by product was 241 million yuan, down 16.4% from the same period last year. Proprietary Chinese medicine was 22 million yuan, down 71.6% from the same period last year, and revenue from biological drugs and preparations was 31 million yuan, down 18.15% from the same period last year. The company's products are mainly general medicine, and the competition is fierce. In the future, the company will take drug bidding as the main line, actively adjust business ideas and expand sales channels. The company is also actively adjusting its product structure, in which the company cooperates with the University of Science and Technology of China in the field of new anticancer drugs, and innovative drugs are expected to become the company's profit growth point.
Pharmaceutical business maintains steady growth
The pharmaceutical business income was 465 million yuan, up 9.26% from the same period last year, and the gross profit margin was 18.25%, down 1.24% from the same period last year. The business maintained steady growth, of which the pharmaceutical retail revenue was 167 million yuan, up 11.49% from the same period last year, and the pharmaceutical wholesale revenue was 298 million yuan, up 8.05% from the same period last year. The business maintained steady growth, first, the company actively opened up the distribution of 100 million yuan, such as the second affiliated Hospital of Bengbu Medical College, and second, the income of pharmaceutical retail stores entered a stage of steady growth. The company's pharmaceutical business has a good foundation in Anhui Province, and with the improvement of business efficiency and the expansion of the network, it is expected to usher in rapid growth.
Profit forecast and investment advice
The company's 14-year acquisition of Pasha Pharmaceuticals was not approved by the CSRC, mainly because Push Pharmaceuticals has just passed the GMP certification and has been at a loss. The company will resume the acquisition after Pasha's performance improves, and pay attention to product structure adjustment, incentive mechanism and so on. We estimate that the company's net profit for 2015-2017 will be 0.42 PE 0.57 million yuan, respectively, and its EPS will be 0.14 pound 0.15 pound 0.18 yuan, with the current share price corresponding to 15 max 76. Taking into account future M & An expectations, the company will be rated as "overweight" with a target price of 11.5 yuan.
Risk hint
Bidding and price reduction; risk of new drug research and development
