Event
Haixiang Pharmaceutical released the report that during the reporting period, the operating income reached 1.733 billion yuan, an increase of 26.84% over the same period last year, and the net profit attributed to the parent company was 496 million yuan, an increase of 79.73% over the same period last year.
Main points of investment
The growth came mainly from the pharmaceutical sector. Due to the rapid growth of sales in the international high-end market, the volume and price of Peinan series products and the increase in CDMO/CMO cooperation products of international companies, the pharmaceutical sector achieved business income of 935 million yuan during the reporting period, an increase of 36.35% over the same period last year, and a net profit of 191 million yuan, an increase of 167.81% over the same period last year. The operating income of the dye sector was 798 million yuan, an increase of 19.95% over the same period last year, and the net profit was 305 million yuan, an increase of 48.97% over the same period last year.
The guidance in the three-quarter report was slightly lower than the market expected. Due to Sino-US trade friction, textile and clothing downstream demand is low, based on the principle of prudence, the company expects the third quarter performance range of 1.74-254 million yuan, slightly lower than market expectations. Pharmaceutical sector month-on-month flat, and dye plate affected by seasonal, the third quarter has always been the weakest demand, superimposed low demand for textile clothing, there is a certain degree of uncertainty. However, if the coastal chemical park in northern Jiangsu can not resume production quickly after the National Day, some dye intermediates and commercial dyes may have the risk of being cut off.
The dye plate is planned to be under construction on a large scale. The development idea of the company in the dye plate is clear: first of all, reduce the cost through the layout of the whole industry chain to avoid the impact of dye intermediate price fluctuations on the company's operation. Secondly, at the end of the 15th, the company was keenly aware of the hidden dangers of the Subei Chemical Park and carried out backup capacity construction in Taizhou in time. Finally, the company's production line construction is highly automated, and labor costs are greatly reduced. The 15500-ton dyestuff project under construction in Taizhou is gradually consolidated as planned in September, and the Zhengang 18000-ton dyestuff project under construction is also progressing steadily. After the implementation of the two projects, the company's dye production capacity has quadrupled, and the new production capacity has realized the serialization and clustering of products relying on the original key intermediates.
The high boom in the pharmaceutical sector can be maintained. The renovation of the coastal chemical park in northern Jiangsu has highlighted the company's location advantages, and the company's characteristic API and CMO/CDMO business have developed rapidly. With the promotion of the new domestic pharmaceutical policy, the advantages of API suppliers such as the company with strong cost control and integration advantages are highlighted. The company's product layout has gradually shifted from early anti-infective products to cardiovascular, metabolic, mental illness and immune products.
There is a lot of room for the development of the pharmaceutical sector. In terms of products, the current increment of the pharmaceutical sector is mainly Pei-nan-type intermediates, such as MAP, Pei-nan side chain and so on. In the long term, the company's layout in the direction of Dabiga group ester, acarbose and so on is more worthy of attention. In terms of land reserve, the company has a rich land reserve in southern Sichuan.
Profit forecast and investment rating: the company's net profit from 2019 to 2021 is expected to be 1.019 billion yuan, 1.531 billion yuan and 1.944 billion yuan respectively, and the EPS is 0.63 yuan, 0.95 yuan and 1.20 yuan respectively. The current stock price corresponds to 11x, 8x and 6X respectively, maintaining the "buy" rating.
Risk hint: the production of dye projects under construction is not as expected, and the uncertainty of environmental protection policy in the dye industry.
Uncertainty.
