Qizheng Tibetan Medicine released 2019 semi-annual report: 2019H1 achieved operating income of 610 million yuan, an increase of 12.44% over the same period last year; net profit of 202 million yuan, up 6.28% over the same period last year; and net profit of 186 million yuan, up 4.38% over the same period last year.
The main products grew steadily, and the management expenses increased slightly. In the first half of the year, the company's core product plaster achieved revenue of 465 million yuan, an increase of 11.32% over the same period last year, and a gross profit margin of 88.75%, an increase of 0.49pct over the same period last year. Among the second-tier varieties, the revenue of ointment was 103 million yuan, an increase of 17.63% over the same period last year, while that of pills and powders was 40.38 million yuan, an increase of 13.30% over the same period last year. The company's sales expense rate was 42.36%, a slight decrease of 0.17pct over the same period last year; the management expense rate was 10.56%, an increase of 3.51pct over the same period last year, mainly due to the depreciation of the company's fixed assets, the increase in salary payable to employees, and the new amortization of restricted stock expenses.
Clinical research and development continues to advance, category reserves continue to be enriched. During the reporting period, the company continued to implement the pain integration strategy, increased the research and development of new products and the secondary development of classic products, and the R & D investment increased by 64.15% over the same period last year. At present, Zutang granule is in phase Ⅲ clinical study, Zhengrutie completed phase Ⅱ clinical study, and phase II clinical studies such as Xia Sade capsule and Xiaotong aerosol are being carried out in an orderly manner.
Equity incentives are implemented and performance growth is expected. On May 22, the company completed the first grant of restricted stock incentives in 2019, awarding 2.266 million restricted shares at a grant price of 14.03 yuan per share, accounting for 0.558 per cent of the total share capital of the company before the grant. Encourage 65 people, including company directors, senior managers, core managers and core business backbone.
The release condition is that the company's revenue from 2019 to 2022 is not less than 13.98,16.14,18.78 and 2.19 billion yuan respectively, and the corresponding annual performance growth rate is not less than 15%, 15%, 16% and 16% respectively.
This incentive program has a wide audience and is conducive to the long-term development of the company.
Profit forecast: it is estimated that the EPS of the company from 2019 to 2021 is 0.69,0.77 and 0.85 yuan respectively, and the corresponding PE is 30x, 27x and 24x respectively. Give a rating of "overweight".
Risk tips: terminal promotion is not up to expectations, research and development progress is not up to expectations, bidding price reduction risk
