Main points of investment
Items:
The company announced its annual report for 2018, with an income of 2.586 billion yuan (+ 0.08%), a net profit of 187 million yuan (+ 15.26%) and a non-return net profit of 166 million yuan (+ 18.02%). The EPS is 0.21 yuan. There will be no profit distribution this year.
At the same time, the company announced its quarterly report in 2019, with an income of 295 million yuan (- 23.07%) and a net profit of 19.19 million yuan (+ 26.84%).
Peace viewpoint:
The gross profit margin decreased, and the fee control led to a corresponding decrease in the expense rate: in 2018, the gross profit margin was 75.66% (- 2.96pp), mainly due to the decrease in product prices and the decrease in the proportion of products with high gross margin; the sales expense rate was 46.33% (- 5.91pp), mainly due to the company's active cost control measures such as reducing travel expenses; and the management expense rate was 15.32% (+ 3.08pp), mainly due to the increase in R & D expenses. The financial expense rate is 3.17% (- 0.40pp), with little fluctuation.
Shenxiong and elemene declined slightly, while other varieties grew steadily: according to varieties, Shanghai Jingfeng, which mainly produces sodium hyaluronate, achieved an income of 251 million yuan (+ 2%) and a net profit of 43 million yuan (+ 16%). Guizhou Jingfeng, which mainly produces Shenxiong glucose injection, has an income of 958 million yuan (- 6%) and a net profit of 142 million yuan (+ 10%). Dalian Deze, which mainly produces elemene products, achieves an income of 491 million yuan (- 12%) and a net profit of 99 million yuan (+ 10%). Guizhou Jingcheng, which mainly produces Xinnaoning and other oral preparations, achieves an income of 317 million yuan (+ 11%) and a net profit of 44 million yuan (+ 0%). Haimen Huiju, which mainly produces APIs, has an income of 216 million yuan (+ 17%) and a net profit of 54 million yuan (+ 23%). Although the income of Shenxiong and elemene declined, the profits of the subsidiaries of the group grew well. Shang Jin and the United Shield Hospital lost a total of 120 million yuan, which dragged down the company's net profit.
Due to the adjustment of the name of elemene, the revenue decreased significantly in the first quarter, and it is expected to return to normal in the second quarter: the company's elemene was renamed from "elemene injection" to "elemene emulsion injection", and the renaming process had a certain impact on sales. as a result, the company's revenue fell more in the first quarter. However, all adjustments have been completed in the first quarter, and normal shipments are expected to resume in the second quarter. Revenue fell in the first quarter compared with the same period a year earlier, while profits increased year-on-year because of minority equity.
Maintain the "recommended" rating: the company actively carries out sales reform and minimizes the negative impact of the policy on Shenxiong and elemene by increasing sales efforts, and other major products are growing steadily. Due to short-term events, the first-quarter results were lower than expected and are expected to improve in the future. Flurbiprofen axetil is expected to be listed in 2019, and the company is expected to submit Sino-US double newspaper products in the past two years, which will bring new growth points. As the income growth rate is lower than the original forecast, the performance forecast is slightly downgraded. It is estimated that the EPS for 2019-2021 will be 0.22max 0.23max 0.26 yuan (the original forecast EPS for 2019 and 2020 is 0.26max 0.32 yuan respectively), and the corresponding PE will be 27x/25x/23x, respectively, maintaining the "recommended" rating.
Risk hint
1. Policy risk: there are frequent policies in the pharmaceutical industry, such as drug price reduction, two-vote system, zero bonus and other policies have an impact on the company's business in the short term.
2. the risk that the product can not win the bid: the company's products are basically prescription drugs and need to be sold in hospital. if the important varieties are absent in some provinces, it may affect the sales income.
3. The progress of research and development is not as expected: drug research and development may fail in the whole process, and the company has many projects under research, among which some important varieties have entered the clinical stage, which may have a negative impact if they fail.