The company completes asset exchange and Warwick Pharmaceutical maintains growth in adversity.
The company announced its annual report that the company achieved 744 million yuan in operating income for the whole year, down 7.94% from the same period last year, and realized a net profit of 139 million yuan, mainly contributed by non-recurring gains and losses from asset purchase. In September 2016, the company completed the asset exchange and bought out the coal assets of the listed company at a consideration of 255 million yuan, at the same time at a price of 1.945 billion yuan. By issuing shares, the company formally completed the transformation from coal as the main business to pharmaceuticals as the main business. Huawei Pharmaceutical achieved a net profit of 88.3815 million yuan after deduction for the whole year of 2016, an increase of 16.90% over the same period last year. It is expected that the chemical drug registration classification reform has had a certain impact on the company's original business, the company has maintained performance growth by actively developing new business, and ensured the pace of future development of the company.
Huawei Pharmaceutical is a high quality asset of CRO, and its business layout is in line with the development direction of the industry.
Huawei Pharmaceutical is a leading preclinical CRO company in China, which has rich experience and profound understanding in drug research and development, especially in the establishment of the first imitation drug project, process development, quality control and drug registration. At this stage, the company has laid out clinical CRO and CMO business downstream, and established a joint venture with Kangyuan Pharmaceutical Co., Ltd. to focus on the research and development of chemical generics; the company has profound accumulation in the field of pharmaceutical evaluation. Lian, as a subsidiary of Warwick Pharmaceutical's clinical CRO business, also has the ability of clinical BE monitoring, which is expected to take the lead in the market of 10 billion CRO conformance evaluation.
Endogenesis + epitaxy to create a platform for pharmaceutical innovation, a comprehensive layout of the sunrise industry to welcome new students
On January 2, 2016, the state-owned companies of six divisions, Li Yi Investment and Ruidong Fortune signed the Strategic Cooperation Agreement, and the parties agreed to support Baihua Village in the continuous acquisition of high-quality business assets in pharmaceutical R & D outsourcing services and biopharmaceutical. We believe that after the completion of this asset restructuring, the company will give priority to integrating high-quality assets in the field of CRO, further improve the CRO industrial chain, and further merge and integrate excellent domestic and international pharmaceutical R & D, production and service enterprises, so as to build the company into a pharmaceutical innovation platform enterprise with sustained and steady growth of performance covering the whole pharmaceutical innovation industry chain, and enhance the company's ability to acquire value in the R & D industry chain.
Profit forecast and investment advice
After the completion of the asset exchange, the company jumped into the CRO industry chain and has placed assets Huawei Pharmaceuticals is a leader in the CRO industry with strong profitability and strong expectations for further placement of high-quality pharmaceutical assets in the future. the company aims to build a platform company for pharmaceutical innovation through endogenesis and denotation. Regardless of the performance contribution brought by the future asset restructuring and statement for the time being, we estimate that the net profit of Warwick Pharmaceutical in 17-19 will be 1.30 yuan, 156,188 million yuan, and it is expected to realize EPS0.32/0.39/0.47 yuan. Taking into account the company's industry and future asset restructuring expectations, we give the company a target price of 22.4 yuan, corresponding to a valuation of 70,000,57 times in 2017-18, maintaining an overweight rating.
Risk hint: Huawei Pharmaceutical's performance is not up to expectations; the progress of asset restructuring is not up to expectations.