Items:
According to the 2018 annual report, the company achieved an income of 1.322 billion yuan, an increase of 24.05% over the same period last year, a net profit of 221 million yuan, an increase of 20.95% over the same period last year, and a net profit of 108 million yuan, an increase of 24.76% over the same period last year. The company's performance is basically in line with expectations. The performance allocation plan is 1.2 yuan per 10 shares.
At the same time, the company released a report for the first quarter of 2019, with an income of 367 million yuan, an increase of 8.46% over the same period last year, a net profit of 89.37 million yuan, an increase of 6.29% over the same period last year, and a net profit of 58.92 million yuan, an increase of 5.86%.
Peace viewpoint:
The company's performance was basically in line with expectations, and the proportion of raw materials and drugs increased: in 2018, the company achieved an income of 1.322 billion yuan, an increase of 24.05% over the same period last year, and a net profit of 221 million yuan, an increase of 20.95% over the same period last year. Of this total, the sales of APIs totaled 623 million yuan, up 32.04 percent over the same period last year, accounting for 47.17 percent of the total, up from 44.31 percent in 2017. The increase in the proportion of APIs caused the company's overall gross profit margin to fall by 2.88 pp to 48.89%. At the same time, due to the increase in the price of raw materials, the gross profit margin of API itself also dropped 3.66 pp. The company expense rate in 2018 was 28.72%, 1.54 pp less than the previous year. Due to the high base in the same period last year, the growth rate of 2019Q1 performance has slowed down, and it is expected that the results will be more average among the quarters in 2019.
The preparation plate grew steadily, and the high-speed release of low molecular weight heparin: the sales revenue of the preparation plate in 2018 was 698 million yuan, an increase of 17.80% over the same period last year, and basically remained stable. Among them, the sales volume of standard heparin sodium preparation is expected to be basically the same as that of the previous year, about 23 million units, and the average price in 2018 is about 5 yuan, which is obviously higher than that in 2017. the annual sales of enoxaparin and dahparin are close to 2 million, and are expected to double in 2019. Natroheparin is currently in the stage of preparation for the market, and the real volume is expected to be in 2020. At present, the company's three major low molecular weight heparin varieties are available, which will become the main growth point of the company's profits; Yikai and Yimei have a combined income of more than 500 million yuan, and the OTC layout is smooth, which is expected to contribute more achievements in 2019.
The first innovative drug QHRD107 carries out clinical practice, and the follow-up research and development pipeline is rich: in July 2018, the company's first first class new drug QHRD107 obtained clinical approval, and it is also the first clinical CDK9 inhibitor in China. The application indication is AML, and the annual market space is expected to reach 1 billion. The company has been approved for only 3 months from declaration to approval, which shows that the company is well prepared in R & D. The company has rich reserves of follow-up products. Among the biomolecule drugs developed by Zhonghong Research Institute, ZHB202 is used in the treatment of acute lymphoblastic leukemia (ALL) and ZHB206 is used in the treatment of mild to moderate cerebral infarction. Two varieties have completed preclinical preparations and are currently applying for clinical application. In addition to the currently approved clinical QHRD107 project (LS007), the LS010 project is also in the stage of preclinical research and is expected to be reported to the clinic in 2019.
Profit forecast and investment rating: the company's raw materials are still in a rising trend of volume and price, low molecular weight heparin preparation is released at a high speed, the price of standard heparin sodium preparation is well maintained, and the OTC end of Yikai and Yimei is developed smoothly. At the same time, the company's innovative drug layout is rich, varieties have entered the clinic one after another, and the posture of the dark horse is obvious. Considering the slight decline in the growth rate of the company's preparation, we adjusted our EPS forecast from 0.29,0.37 yuan to 0.24,0.28 yuan from 2019 to 2020. at the same time, we expect EPS to be 0.36 yuan in 2021, maintaining the "recommended" rating.
Risk hint: 1) R & D risk: new drug research and development is a high-risk and high-return behavior, which needs to go through many steps such as pharmacology, toxicology, preclinical trial, clinical trial and so on. 2) Market promotion risk: the company's preparation products are mainly sold in hospitals, facing fierce market competition, which may affect sales growth due to intensified market competition. 3) risk of price fluctuation of heparin API: the price of heparin is volatile, although the proportion of business has been low, if the price of heparin falls, it will still affect the company's income and profit volume.